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Determination
Case number | 1072268 |
Financial firm | AIG Australia Limited |
Case number: 1072268 20 May 2024
The complainant lodged a claim with the financial firm (insurer) under his travel insurance policy on 30 October 2023. He cancelled his trip from London to Tel Aviv due to the war in Israel. He returned back to Australia earlier than originally planned.
The insurer denied the claim on the basis the policy excludes cover for losses incurred as a result of war, invasion, revolution or any similar event, any terrorist act, military and/or government intervention.
The complainant disputes the insurer’s claim denial. He expects the insurer to accept the claim as he was misled about policy coverage by the insurer’s authorised representative and policy issuer Q.
No. The complainant sought claim related information from Q. Q provided information about policy cover including a copy of the Product Disclosure Statement (PDS). There is no evidence to show Q confirmed the complainant’s claim for cancellation and additional expenses would be covered under the policy.
Regardless of his correspondence with Q, the situation in Israel at the time was not conducive for the complainant to have continued with his original travel plans. The complainant has not shown that he relied on Q’s response to his detriment.
Yes. The complainant has established a valid claim for cancellation and additional expenses as the change of travel plans was unexpected and out of his control. The policy however excludes cover for claims arising from a war.
The outcome is fair because the complainant’s circumstances were not covered under the policy. It would be unfair to expect the insurer to cover claims outside the agreed policy terms.
This determination is in favour of the insurer.
The insurer is entitled to deny the claim. It is not required to take any further action.
No. The complainant sought claim related information from Q. Q provided information about policy cover including a copy of the Product Disclosure Statement (PDS). There is no evidence to show Q confirmed the complainant’s claim for cancellation and additional expenses would be covered under the policy.
Regardless of his correspondence with Q, the situation in Israel at the time was not conducive for the complainant to have continued with his original travel plans. The complainant has not shown that he relied on Q’s response to his detriment.
The complainant’s travel insurance policy was issued by Q on 13 August 2023 for the travel period from 3 October 2023 and 27 October 2023. The policy was underwritten by the insurer.
AFCA can consider a complaint about misleading conduct by an insurer. The complainant may be entitled to compensation if:
If AFCA decides the insurer misled the complainant, it will consider what loss they suffered as a result. If the insurer gave the complainant incorrect information, but they could not have done anything differently if they had the correct information, AFCA may not award them any compensation.
On 8 October 2023, the complainant emailed Q seeking advice:
Could you please advise regarding planned trip to Israel on Sunday 15th Oct (UK to Israel) and leaving Saturday 21st October (Israel to Malta[)].
With the current situation there, we may not proceed with this trip and ask advise on how to claim airfares and accommodation, all paid in full.
Q’s representative emailed the complainant back highlighting the policy benefits available, attached a copy of the relevant PDS, explained its claim process, provided a link to the claim form and stated:
Please keep in mind that all decisions regarding reimbursement of claims will be made by the claims department and will be based on the policy terms, conditions, and exclusions as well as documentation you provide when you file a claim.
The above response also referred the complainant to its general contact details including the details of the Emergency Assistance Team (EAT), which could be used if the complainant needed immediate assistance.
I note the complainant’s email says that he may not proceed with the trip and sought advice on how he could make a claim for the airfares and accommodation. He did not ask Q to confirm if his claim circumstances would be covered under the policy. I accept that Q would not have been in a position to confirm cover without having an opportunity to review the claim details and supporting information.
I acknowledge the complainant thought his claim would be honoured by the insurer as he had notified Q about his change of travel plans with reasons for same. If the complainant required confirmation of cover, he could have contacted the EAT for assistance.
The complainant believes that Q’s representative’s statement below indicated they were confirming cover:
In regard to your concern, please be informed that as per reviewing your policy with us, you have the following benefits which are applicable to your concern.
The email referred the complainant to the policy benefits that may apply to him. A copy of the PDS was attached for his review which explained the terms and conditions that would be applied in assessing the claim.
The response specifically informed the complainant that his claim would be assessed based on the supporting evidence once submitted. I am satisfied insurer would assess each claim submitted by its insureds based on the individual circumstances of the loss, merits including the policy terms and conditions.
Based on the exchanged information and for the reasons above, I am not satisfied the complainant has established that Q misled him that his claim for cancellation and additional expenses would be covered under the policy.
The complainant believes Q had misled him about policy cover. For the reasons explained above, I disagree.
Regardless of his correspondence with Q, the situation in Israel at the time was not conducive for the complainant to have continued with his original travel plans. The evidence shows that war had been recently declared and the pre-planned conference he was scheduled to attend in Jerusalem was cancelled because of the bombing and unsafe conditions.
The complainant says that had he known the insurer may not cover his claim, he may have extended his stay in the UK and/or travelled directly to Malta.
Given the exchanged information between the parties, I am not satisfied the complainant has established that he relied on Q’s response to his detriment.
Even if I were to accept that Q has misled the complainant regarding the level of cover under the policy (which I do not), I am not satisfied that the complainant has shown that he has relied on this misrepresentation to his detriment. This is because:
Yes. The complainant has established a valid claim for cancellation and additional expenses as the change of travel plans due to the war in Israel was unexpected and out of his control. The policy however excludes cover for claims arising from a war.
When making a claim, an insured party has the onus of establishing he suffered a loss for which his insurance policy provides cover. The insured party must establish this on the balance of probabilities (i.e. that it is more likely than not).
If a claimable loss is established, the insurer has the onus of establishing, on the balance of probabilities, the application of any exclusion it relies on to reduce its liability.
There is no dispute the complainant received a copy of the policy documents. The insurer is therefore entitled to rely on the terms and conditions of the policy in assessing his claim.
The policy covers cancellation and additional expenses incurred due to something that was unexpected and outside the complainant’s control. The war being declared or the worsening of the situation in Israel was neither expected nor under the complainant’s control. The complainant has therefore established a valid claim under the policy.
Once the complainant established a valid claim under the policy, the onus shifts to the insurer to show an exclusion applies to defeat the claim. The insurer has quoted several exclusions that apply to the complainant’s claim.
The policy excludes cover for events that are outside the complainant’s control including war, civil war, invasion, revolution or any similar event.
The policy defines war as a hostile contention caused by or between nations or states, or parties in the same nation or state, exercising at least de facto authority within a given territory and commanding an armed force. It also includes incidents directed or carried out by a member or members of an armed force in the prosecution of war.
The complainant cancelled his travel to Tel Aviv on 15 October 2023. An email between the complainant and the conference organiser in Israel dated 9 October 2023 confirms that a state of war has been declared by Israel. The complainant himself accepts the travel plans were changed because of the war in Israel.
The insurer is therefore entitled to deny liability for the claim for cancellation and additional expenses which arose because of the war in Israel. It is not necessary to assess if the other exclusions quoted by the insurer apply in the circumstances.
The outcome is fair because the complainant’s circumstances were not covered under the policy. It would be unfair to expect the insurer to cover claims outside the agreed policy terms.
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.
