You’re offline. This is a read only version of the page.
Determination
Case number | 12-00-1054176 |
Financial firm | Lloyd's Australia Limited |
Case number: 12-00-1054176 26 June 2024
The complainant held a comprehensive travel policy with the financial firm (insurer). The complainant lodged a claim for additional expenses incurred after a flight from Palermo to London was cancelled due to crew issues.
The insurer assessed and declined the claim as it says the policy does not cover cancellation costs which arise due to a cancellation caused by crew issues.
The complainant disagrees and says the insurer has interpreted the insuring clauses of the policy too narrowly and says that ‘crew issues’ are akin to industrial action, or an accident and the insurer should cover his claim..
No. I am satisfied the complainant has established a valid claim under the disruption of journey section of the policy. I am also not satisfied the insurer has established the application of the exclusion(s) it seeks to rely on to defeat the claim.
The outcome is fair as the complainant has established a valid claim within the terms of the policy. It is fair the complainant is settled for his loss when the insurer has not established the application of the exclusion(s) it seeks to rely on.
This determination is in favour of the complainant.
The insurer is required to pay the complainant $2,000. The insurer is to pay this amount with 14 days of the complainant accepting this determination.
No. I am satisfied the complainant has established a valid claim under the disruption of journey section of the policy. I am also not satisfied the insurer has established the application of the exclusion(s) it seeks to rely on to defeat the claim.
The complainant is required to show, on the balance of probabilities, a loss occurred because of an event covered under the terms and conditions of the policy.
If the complainant can establish a claim within the terms of cover, the burden shifts to the insurer to establish an exclusion applies or that it is otherwise entitled to decline the claim.
There is no dispute that the complainant’s flight on 16 August 2023, from Palermo to London was cancelled, which caused the complainant to incur additional transport and accommodation costs. However, whether the cancellation of the flight falls within the cover provided by the policy, is in dispute.
The insurer says it has considered the complainant’s claim under the relevant sections of the policy being:
See section 3.2 of this determination for the relevant policy wording.
The insurer says cover is only triggered under the additional accommodation and travel expenses section if the expenses are incurred because of one of the listed reasons. The insurer accepts transport cancellation is one of the listed reasons. However, says cover is limited to if the cancellation is because of:
The insurer says the reason for the cancellation in this instance was crew issues, which is not one of the listed events and a valid claim has not been established under this section.
The insurer says the complainant’s claim is not covered under the disruption of journey section as the reason for the disruption is not one of the reasons the policy responds to and that it is also specifically excluded by the policy.
The insurer says cover under the policy has not been triggered and it is entitled to decline the claim.
The complainant says the policy should respond to cover the loss because:
While I acknowledge the complainant’s positions and submissions, I am not persuaded they assist in establishing a claim under the additional travel and accommodation expenses section of the policy.
This is because the complainant has not provided any persuasive information the flight was cancelled because the crew had worked over their legal hours. Further even if he had I am not persuaded it would assist. This is because I do not accept a crew being unable to fly because of regulations is similar to a strike.
A strike is a refusal or decision to stop work whereas any limit imposed on working hours is not a refusal or decision to work, it is a restriction.
I also am not persuaded that crew member’s being unable to fly due to hours worked should be considered in a similar way to an ‘accident involving your mode of transport’. This is because the term in the insuring clause is referring to an event that happened, rather than as the complainant contends, cancelling it to avoid a possible accident.
I have considered the complainant’s position the policy wording contained in the additional expenses section is ambiguous, however I not satisfied this is the case. Rather I am satisfied the wording is clear in that this section only covers additional accommodation and travel expenses caused by transport cancellation in the seven listed scenarios.
I also do not accept the complainant’s position the insurer breached the principal of utmost good faith. The insurer has assessed the loss within the terms of the policy, and while the complainant may not agree with how the insurer did so, it does not mean it was a breach.
However, whether the complainant is entitled to relief under the disruption of journey (DOJ) section needs consideration.
While I acknowledge the insurers position the circumstances of the loss that gave rise to the claim are not covered under DOJ section, I do not agree. This is because the section says the policy will respond if the transport is cancelled or delayed because of a reason outside of the complainant’s control and that the delay is more than six hours.
Based on the exchanged information the flight was cancelled because of ‘crew issues’, I am satisfied this was outside of the complainant’s control. The information also shows the flight was rescheduled to the next day, I am satisfied that this was greater than six hours.
I am satisfied the complainant has established a valid claim under this section of the policy. I acknowledge the insurer also says the circumstances of the loss are expressly excluded by the policy, however, in relation to this section of the policy the insurer did not outline which exclusion is it seeking to rely on and why the exclusion has been triggered.
I acknowledge and accept some of the costs the complainant is seeking cover for may not be covered by the event of specific exclusions or limitations, however it is not AFCA’s role to make a party’s arguments, it is to test them. As the insurer has not outlined which exclusion(s) or limitations are applicable to this section, I am unable to test whether it has established the application of the exclusion(s) or limitations.
Given this I am not persuaded the insurer has outlined it is entitled to decline or reduce the claim under this section.
However, cover under this section has a maximum benefit of $2,000, with no excess being applicable. The complainant’s claim exceeds this amount. While I am satisfied the insurer has not established it is entitled to pay less than this amount, I am satisfied that this is the maximum amount payable.
Accordingly, I am persuaded it is fair the insurer pays the complainant $2,000 being the maximum policy benefit. The insurer is to pay this amount with 14 days of the complainant accepting this determination.
The outcome is fair as the complainant has established a valid claim within the terms of the policy. It is fair the complainant is settled for his loss when the insurer has not established the application of the exclusion it seeks to rely on.
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.
Key Wording |
Additional Accommodation & Travel Expenses
This cover is available on all plans other than the Essentials and Medical Only plans. Please Note: You will not have cover under this Policy section while travelling on a Cruise Vessel or while participating in Winter Sports Activities unless You purchase the Cruise pack or the Winter Sports Pack. We Will Pay We will reimburse; .. c) Your Reasonable additional travel and accommodation expenses if a disruption to Your Journey Arises from the following reasons:
..
|
Disruption Of Journey This cover applies to all plans other than the Medical Only and Essentials plans. We Will Pay If Your pre-paid scheduled transport is cancelled, rescheduled or delayed for a reason outside of Your control, We will pay the disruption of Journey benefit shown in the Table Of Benefits, subject to the following:
a) If You are delayed for at least 6 hours, We will pay You up to $200 for Reasonable additional meal and accommodation expenses at the end of the initial 6-hour period; and up to $200 for each full 24- hour period that the disruption continues beyond the initial 6- hour delay; and/or b) If You cannot reach Your next destination or connecting transport on time, We will pay You toward the cost of Your pre-paid, unusable, non-recoverable, accommodation, flights, transfers, tours and events expenses.
We Will Not Pay We will not pay for a disruption to Your Journey if:
a) You missed a connecting flight or transport service where the stopover, layover or connection originally scheduled on Your itinerary was less than 4 hours. b) You can claim Your additional meal and accommodation or non-refundable out of pocket expenses from anyone else. c) The disruption to Your Journey Arises from the financial collapse of any travel agency, booking agent, transport, tour or accommodation provider. d) The disruption to Your Journey Arises from an act or threat of terrorism. e) New flights or other transport costs or upgrades for You to continue Your Journey. |
