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Liberty Specialty Markets
Liberty Specialty Markets

Travel cover dominates insurance disputes

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Travel claims account for most general insurance disputes since October 1, when the Australian Financial Complaints Authority (AFCA) started naming companies in its rulings.

An search of the AFCA website shows travel complaints led the way with six, followed by five each for motor vehicle and home and contents.

The other disputes relate to claims for landlord, machinery breakdown and loss of income covers.

Half of the six travel cases involved policy exclusions for pre-existing medical conditions.

In one where the outcome went in the favour of the joint complainants, AFCA ruled Zurich had no grounds to rely on non-disclosure of a previous episode of angina and high blood pressure medication to reject the claim for cancellation of trip costs.

The couple involved had cancelled the trip after one of them required a coronary artery bypass graft.

Zurich says it would not have provided the cover if the couple had disclosed the details. The insurer also argues the claim arose from a pre-existing condition for which no additional cover was correctly applied for.

But AFCA sees the matter differently. It says Zurich has not shown “it clearly informed the complainants of the general nature and effect of the duty of disclosure prior to the inception of the policy.”

“[Zurich] cannot therefore rely upon the incorrect answers to two questions to deny the claim,” AFCA says.

“Further, it has not provided sufficiently compelling information to establish it would not have entered into the insurance contact with the complainants.”

AFCA further adds Zurich is not entitled to rely on the pre-existing condition exclusion as it “was on risk for any loss caused by cardiac failure, which broadly applies to the condition causing the claim”.

Zurich was ordered to pay the complainants $19,750 plus interest.

In another case, this time with the outcome going against the complainant, AFCA ruled that Tokio Marine & Nichido Insurance was entitled to reject the claim as the policy did not cover loss for a pre-existing condition, liability or expenses.

The customer cancelled her trip last year to Vietnam and Cambodia after her brother was diagnosed with lung cancer. The siblings had planned to visit the countries together.

“The available information establishes, on the balance of possibilities, that [her brother] has been receiving medical advice and was being investigated for his medical condition within 12 months of the complainant purchasing the policy,” AFCA says.

“Accordingly, such a medical condition is defined and excluded as a pre-existing medical condition as specified in the product disclosure document.”

According to the Consumer Action Law Centre, travel insurance is an area where consumers are unfairly disadvantaged.

“People continue to face shocking outcomes at claims time when it comes to travel insurance,” Senior Policy Officer Cat Newton told

“It’s time for insurers to look at their policies carefully… and to ensure that they are selling those policies appropriately for people who can benefit from them and understand what they are signing up to.”

Last March the Australian Securities and Investments Commission said it was considering a review of travel insurance in response to the number of complaints made by consumers.