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Determination
Case number | 1060744 |
Financial firm | Lloyd's Australia Limited |
Case number: 1060744 6 June 2024
The complainant lodged a claim with the financial firm (insurer) under her travel insurance policy. She cancelled her trip to Marrakech and returned home early, after an earthquake with a magnitude of 6.8 hit the High Atlas Mountains in Morocco.
The insurer denied liability for the claim on the basis the complainant had not established a valid claim for additional travel expenses and cancellation fees. The policy also does not cover these expenses when the complainant changes plans.
The complainant disputes the insurer’s claim denial. She seeks the insurer to accept the claim because the loss was caused by a natural disaster and it was unsafe to travel to Marrakech at the time.
Yes. The complainant cancelled her trip to Marrakech due to an earthquake. The earthquake was unexpected, unintended and outside of her control. The policy however does not cover the complainant changing plans. The complainant’s flights and accommodation were not cancelled by the respective operators due to the earthquake.
The complainant’s claim for additional travel expenses was not caused by an insured event specified under the policy.
It would be unfair to request the insurer to pay a claim which falls outside of the terms of the policy.
This determination is in favour of the insurer.
The insurer is entitled to deny the claim. It is not required to take any action.
Yes. The complainant cancelled her trip to Marrakech due to an earthquake. The earthquake was unexpected, unintended and outside of her control. The policy however does not cover the complainant changing plans. The complainant’s flights and accommodation were not cancelled by the respective operators due to the earthquake.
The complainant’s claim for additional travel expenses was not caused by an insured event specified under the policy.
The complainant is required to show, on the balance of probabilities (that it is more likely than not), that she suffered a claimable loss under the policy. This means she must show the loss was caused by a risk for which she is insured. This is referred to as a valid claim.
Once the complainant proves the existence of a claimable loss, the insurer is liable for the loss unless it shows an exclusion or limiting condition applies. The insurer has the onus of proving on the balance of probabilities the application of the exclusion or condition.
There is no dispute the complainant received a copy of the policy documents. The insurer is therefore entitled to rely on the policy terms and conditions in assessing the claim.
The complainant purchased a travel insurance policy on 28 June 2023 for the travel period from 5 September 2023 to 22 September 2023.
The complainant left Sydney to Paris via Doha on 5 September 2023 and was scheduled to return on 19 September 2023 via the same route. She was scheduled to fly to Morocco from Paris on 14 September 2023 and returning to Paris on 18 September 2023.
The earthquake occurred on 8 September 2023. The complainant cancelled her trip to Morocco and changed her travel itinerary to return to Australia on 15 September 2023 instead of 19 September 2023
The policy covers additional travel expenses incurred if the complainant’s journey was disrupted by the scheduled or connecting transport being cancelled, delayed, shortened or diverted because of several listed events. This included a natural disaster.
The operation of the complainant’s EJ flight from Paris to Morocco was not impacted by the earthquake. It was not cancelled or delayed due to the natural disaster and it continued its operations. I am therefore not satisfied the complainant has established a valid claim for additional travel expenses under the policy.
The policy covers cancellation costs if the complainant’s journey was cancelled or shortened at any time, and through circumstances that she did not expect or intend or outside of her control.
The complainant did not travel to Marrakech after the earthquake. EJ refunded only the taxes and the accommodation provider in Marrakech did not charge any cancellation fees.
The complainant’s attempts to contact the accommodation provider to understand the situation, including information whether the location/accommodation was safe to visit, was unsuccessful. She took the non-response from the accommodation provider to mean the infrastructure had broken down.
The complainant accepts that no one requested her to cancel the EJ flights to Morocco. She made the decision to cancel her flights based on the news reports, advice in Smart Traveller website and the risk of aftershocks. She felt it was unsafe and risky to travel to Marrakech given the conditions at the time.
The parties have provided several news articles and video clips showing the extent of damage sustained to or close to the areas in Marrakech, where the complainant’s accommodation was located. The complainant says:
The insurer presented news articles which say:
The insurer says the Smart Traveller referred to the earthquake which had affected areas southwest of Marrakesh and advised to avoid travelling to impacted areas. It did not advise travellers not to travel to Morocco, but that individuals inform themselves of the risks and take responsibility for their decisions.
The insurer says the complainant was not prevented from travelling to Morocco but made the decision to change her plans, considering the situation in Morocco.
I accept the earthquake was unexpected, unintended and outside of the complainant’s control.
I acknowledge the complainant’s concerns that it was unsafe to travel, and she may have not been able to do anything, if she had proceeded with her original travel plans to Marrakech.
I accept the situation was not conducive for travel and she was cautious and took a decision to cancel her trip based on the information available to her at the time. The earthquake occurred on 8 September 2023 and on 9 September 2023 she cancelled her trip. This was five days before she was due to travel.
Given the following:
I consider the complainant’s cancellation of the trip five days before she was due to travel to falls within the policy exclusion for changing travel plans. It follows the insurer is entitled to deny the claim.
It would be unfair to request the insurer to pay a claim which falls outside of the terms of the policy.
AFCA has determined this complaint based on what is fair in all the circumstances, having regard to:
The respective parties have completed a full exchange of the relevant information, and each party has had the opportunity to address any issues raised. We have reviewed and considered all the information the parties have provided.
While the parties have raised several issues in their submissions, we have restricted this determination to the issues that are relevant to the outcome.
AFCA is not a court of law. We do not have the power to take or test evidence on oath, or to require third parties to give evidence.
When we assess complaints, we consider:
We give more weight to documents created at the time the events occurred. If there are no relevant documents, we will decide what most likely occurred based on the available information.
If there are conflicting recollections and these are evenly weighted, we may find that a claim cannot be established.
