We all do it. We spend hours, days, an inordinate amount of time making travel plans and researching where we want to go and what or who we want to see when we get there. Then we buy the first travel insurance policy we come across, usually at the moment we’re packing our bags. Sound familiar?
Travel insurance is too important not to take seriously because when things go wrong, they go badly wrong. Even though there are dozens of policies on the market, travel insurance is definitely not a one-size-fits-all product. Just as each individual’s circumstances are different, travel policies differ, sometimes ever so slightly and the worst time to discover this is at claims time!
We take plenty of trips each year: New Zealanders made 2.28 million trips overseas in the year prior to January 2015. That was an increase of 4%. Half of those trips were to Australia, while the next most-visited destinations were the United States (166,500), Fiji (131,500), the United Kingdom (102,000), the Cook Islands (76,500), and China (75,800).
With so much travel being done, perhaps it’s not surprising that the Financial Services Complaints Ombudsman receives a range of complaints every year about claims that were knocked by travel insurers. Generally the reason that the claims were knocked back is because consumers did not read or check their policies to find out exactly what they were covered for and the limits to that cover.
Travellers to Thailand beware
J & M were on holiday in Thailand. During their stay in Bangkok they were directed by a local guide to a travel agency, Super Tours Thailand (Super Tours), supposedly a government approved agency specialising in local tours and travel. J & M decided to book a holiday including flights and accommodation and paid Super Tours for all the travel costs in cash.
J & M then had some doubts about the authenticity of the bookings just made and on searching the internet discovered blogs about Super Tours suggesting it was a fraudulent organisation. With the help of the New Zealand Embassy and the local travel police J & M returned to Super Tours and managed to obtain a refund of part of their money. They remained out of pocket by more than $900.
J & M claimed for their loss under their travel insurance policy on the basis that they were victims of a scam which was an unexpected event outside their control. The travel insurer declined the claim because it did not consider the circumstances of the loss were covered by the terms and conditions of the policy.
The travel policy covers cancellation fees and lost deposits when a journey has been shortened or cancelled which cannot be recovered in any other way. In this case J & M did not incur cancellation fees or lost deposits. In fact the booking arrangements did not exist. As the booking did not exist, it followed that the arrangements could not be cancelled or shortened so the claim did not meet the policy requirements. The Ombudsman agreed.
To help consumers match the right policy to their needs, we research travel insurance policies yearly to highlight those that offer the mix of price and features that represents outstanding value.
This time around, we looked at 54 travel insurance policies from 32 providers. We tested the policies across three different profiles – single, couple, family – travelling to different regions – Australia, the Cook Islands, Fiji, Thailand, China, France, UK and the USA.
Our results will steer you in the right direction next time you want to insure your holiday or business travel!