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Hawaii holidaymaker loses dispute over wildfire exclusion

A Mitsui Sumitomo customer who bought a travel policy to visit Hawaii was not misled by the way optional natural disaster cover was presented on the insurer’s website, the industry’s dispute adjudicator has ruled.

The woman lodged a claim for unused travel and emergency expenses after her family trip was disrupted by bushfires in Maui last August.  

The fires began while she was flying into Hawaii. She had to get an emergency flight off the island within two hours and pay for new accommodation.

The insurer denied the claim on the basis the woman failed to take out optional cover for natural disasters when she bought the policy online on June 15.

The claimant told the Australian Financial Complaints Authority (AFCA) the insurer’s website did not clearly indicate she was required to purchase it.

“I cannot accept she was misled into believing the policy would respond to natural disaster claims,” the ombudsman said, ruling in favour of Mitsui Sumitomo.

“It would be unfair to request the insurer to pay a claim arising from a natural disaster when the complainant had not purchased the optional cover for natural disasters. The claim, as a result, falls outside of the terms of the policy.”

The customer complained that her summary of cover did not list natural disaster as an option for purchase, as it did for the other optional covers. The insurer’s website and its product disclosure statement used different words – optional, add-on or upgrade – to describe the cover, and this was confusing, she said.

The description of natural disaster cover on the website did not clearly show it was an optional cover she could buy, she said. More information about the cover was only displayed by pressing an icon, which she had not done.

She had answered “no” to a section about natural disasters, thinking she was being asked if there were disasters at her intended travel destination. The section did not ask if she wanted to buy cover for natural disasters, she said.

But AFCA’s adjudicator says the policy application made clear that natural disaster cover was optional and not part of standard cover.

“I agree the insurer could have used one word consistently to describe the natural disaster optional cover offered under the policy. Further, I agree the insurer could have listed natural disaster as an optional cover along with the other optional covers in the summary.

“However, I do not accept the application was misleading. There is nothing in the application that said she would be covered for natural disasters. The website refers to the cover as an add-on ... I do not accept it could reasonably be interpreted to mean she is covered for natural disasters.” 

See the ruling here.