A travel insurer was entitled to use its war exclusion to reject a claim for a Middle East trip that was cancelled following an airspace closure and “do not travel” warning, the industry ombudsman has ruled. 

The insured had booked a Dubai holiday in July last year for March 1 this year. But in the hours before departure, the United Arab Emirates closed its airspace, her flight was cancelled and the Department of Foreign Affairs and Trade upgraded its travel advice for the UAE to “do not travel”. 

She cancelled the trip and incurred $3810.76 in non-refundable accommodation, tour and transport costs. 

Chubb declined the claim, saying the loss arose from or was related to war and was therefore excluded under the policy. 

The complainant argued that her loss was iin fact caused by the airspace closure, flight cancellation and DFAT warning, rather than by war. She also argued that the policy specifically provided cover where DFAT upgraded its advice to “do not travel”, meaning the insurer’s interpretation would largely take away that benefit. 

The Australian Financial Complaints Authority said that while the woman had proved a claimable loss, Chubb was entitled to rely on the policy’s war exclusion, which applied to costs “arising from or relating to” war or any act of war. 

AFCA noted that while there had been no formally declared war when the trip was cancelled,  this was not necessary because the exclusion expressly covered undeclared war. 

It found military strikes and armed hostilities between nation states in the Middle East shortly before the scheduled departure fell within the ordinary meaning of war as a conflict carried on by force of arms. 

AFCA also found the UAE airspace closure, flight cancellation and DFAT warning were responses to the same underlying conflict. 

“I accept the complainant cancelled her trip very shortly after those events occurred and I acknowledge the difficult and stressful position she found herself in," AFCA said.

"While this timing was unfortunate, it does not alter the connection between her loss and the underlying conflict. Nor does it alter the operation of the policy exclusion.” 

Click here for the full ruling.