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Determination
Case number | 1069407 |
Financial firm | Chubb Insurance Australia Limited |
Case number: 1069407 24 May 2024
The complainant is a beneficiary of a group travel insurance policy held by his credit card provider with the financial firm (insurer).
He lodged a claim seeking reimbursement of $2,437.29 for flights purchased for his parents to travel to Australia from Israel in October 2023. The complainant cancelled connecting flights booked between Bangkok and Melbourne after the flight from Tel Aviv to Bangkok was cancelled by the airline on 10 October 2023 following the violent attack in Israel on 7 October 2023.
The insurer declined the claim. It says the complainant has not shown the cancellation was due to a covered event and that exclusions also apply.
Yes. The insurer is entitled to decline the claim.
The outcome is fair because:
This determination is in favour of the insurer.
The insurer is not required to take any further action in relation to this claim or complaint.
Yes. The insurer is entitled to decline the claim.
When making a claim, the complainant has the onus to show he suffered a loss of a type covered under the policy. The complainant must show this on the balance of probabilities (that is, it is more likely than not).
If a claimable loss is shown, then the onus transfers to the insurer to show, on the balance of probabilities, it is entitled to deny the claim or reduce its liability.
The policy provides cover for unrecoverable cancellation costs in specified circumstances (as set out in section 3.2 of this determination), including where paid transport has been cancelled by the travel provider as a result of riot or civil commotion.
The complainant provided:
The complainant seeks reimbursement of $1,595.97 and $841.32 for the flights he cancelled after RJ cancelled the flight to Bangkok.
On his claim form the complainant said the flights were cancelled due to the war in Israel. He explained to AFCA the cancellation was due to RJ being unable to fly to Tel Aviv for the scheduled flight due to the attack in Israel, which he says is a civil riot.
The insurer says the circumstances of the claim do not satisfy any of the covered events in the cancellation section of the policy, though it has not explained why it considers this is the case.
The insurer also says it is entitled to decline the claim due to the following general exclusions:
World Event Exclusions
We will not pay for or reimburse any costs under any section of this Policy arising from or relating to:
28. declared or undeclared war or any act thereof; however, any act committed by an agent of any government, party or faction engaged in war, hostilities or other warlike operations provided such agent is acting secretly and not in connection with any operation of armed forces (whether military, naval or air forces) in the country where the injury occurs will not be deemed an act of war;
29. an act of Terrorism except when such Event occurs under the cover in Section B – Personal Accident Cover or Section D – Medical Emergency Expenses Cover of this Policy;
The complainant says exclusion 28 does not apply as the attack in Israel was a surprise attack by Hamas, which is a faction and not part of the Palestinian government. The complainant has not stated why he considers exclusion 29 does not apply, noting he referred to the attack in Israel as a terror attack in his complaint to AFCA.
The policy defines ‘terrorism’ as follows:
Terrorism means activities against persons, organisations or property of any nature:
1. that involves the following or preparation for the following:
a. use of, or threat of, force or violence; or
b. commission of, or threat of, force or violence; or
c. commission of, or threat of, an act that interferes with or disrupts an electronic communication, information, or mechanical system; and
2. when 1 or both of the following applies:
a. the effect is to intimidate or coerce a government or the civilian population or any segment thereof, or to disrupt any segment of the economy; and/or
b. it appears that the intent is to intimidate or coerce a government, or to further political, ideological, religious, social or economic objectives or to express (or express opposition to) a philosophy or ideology.
The violent attack in Israel on 7 October 2023 has been widely reported on, and I am satisfied it was a terrorist act within the meaning of the policy.
While RJ did not provide a reason for cancelling the flight to Bangkok, the complainant says this was due to the attack in Israel, which he describes as a terror attack. The insurer relies on corresponding exclusions for war and terrorist acts. Accordingly, I am satisfied the parties agree the attack in Israel was the cause of the cancellation, and the disagreement concerns whether this cause is covered under the policy terms.
Even if I accept the attack in Israel was a civil commotion as claimed by the complainant, I am satisfied it was also a terrorist act. Accordingly, I am satisfied the insurer is entitled to rely on the exclusion of costs arising from an act of terrorism to decline the claim.
The outcome is fair because:
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.
Benefits
Section (A) Trip Cancellation And Amendment Cover
This benefit is only available when You meet the eligibility criteria set out in the Eligibility Table.
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SPECIFIC DEFINITIONS – TRIP CANCELLATION AND AMENDMENT COVER
Cancellation means a cancellation resulting in You not starting Your Trip at all. ‘Cancel’ and ‘Cancelled’ has the corresponding meaning.
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COVER – TRIP CANCELLATION AND AMENDMENT COVER
This cover section provides cover for a necessary and unavoidable Cancellation, Curtailment or Trip Change for specified Events, as listed below.
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If You have a necessary and unavoidable Cancellation, Curtailment or Trip Change due to one of the following unforeseen specified Events:
1. You or Your Travelling Companion or a person You are visiting for the main purpose of Your Trip suffering an Injury, an unforeseen Illness or death;
2. Your Close Relative, or a Close Relative of a Travelling Companion or a Close Relative of a person You are visiting for the main purpose of Your Trip suffering an Injury, an unforeseen Illness or dying;
3. Your redundancy which qualifies for redundancy payments under current legislation;
4. You being in the Australian armed services (military, naval or air service) or emergency services (police, fire, ambulance) and Your leave is revoked;
5. You being called for jury service or being subpoenaed as a witness other than in a professional or advisory capacity;
6. You being required by the police or an authority to be present at Your Home or place of business in Australia following burglary, or local major damage such as flood at Your Home or place of business in Australia;
7. Your paid transport has been cancelled by your transport provider as a result of:
a. riot, strike, civil commotion;
b. adverse weather;
c. Natural Disaster;
d. mechanical breakdown of the transport You planned to travel on;
provided that there had been no published official warning, before you make Your Qualifying Travel Purchase, that any such Event had occurred or was likely to occur;
8. there is a Natural Disaster, or a Natural Disaster has recently happened or is reasonably expected to happen, on the direct route to or at Your Trip destination, provided that there had been no published official warning, before You make Your Qualifying Travel Purchase, that any such Event had occurred or was likely to occur;
9. a Natural Disaster or the imminent risk of one at Your Home in Australia;
10. for Your International Return Trip, where:
a. an Australian State or Territory, the Australian Federal Government or an Australian government agency (such as DFAT – Department of Trade and Foreign Affairs) have upgraded a travel advisory warning, advising You:
i. to ‘Reconsider your need to travel’ or ‘Do Not Travel’, or
ii. that borders are closed for the scheduled destination You planned to travel, or
iii. that mandatory quarantine is required at Your destination;
or
b. an Australian state or territory public health authority have:
i. classified You as having close contact with a person diagnosed with an infectious disease or virus which is classified as an epidemic or pandemic; and
ii. directed You into a period of quarantine as a result of this contact;
or
c. an Australian State or Territory, the Australian Federal Government or an Australian government agency (such as DFAT) has implemented a lockdown order (encompassing stay-at-home orders or the restriction of movement of people into or out of a defined geographic region) and the order applies to the geographic region where Your Home is;
and
the warning was published or the order was given after You:
i. make Your Qualifying Travel Purchase in the case of a claim for Cancellation; or
ii. start Your Trip in the case of a claim for Curtailment or Trip Change;
11. a Special Event You were attending has been cancelled or postponed except due to circumstances arising from or relating to an epidemic, pandemic or outbreak of an infectious disease or virus or any derivative or mutation of such viruses;
12. for Your Domestic Return Trip, where an Australian State or Territory Government or government agency have issued an official written government statement advising You:
i. not to travel to Your destination; or
ii. that borders are closed for the destination You have planned to travel to;
except due to circumstances arising from or relating to an epidemic, pandemic or outbreak of an infectious disease or virus or any derivative or mutation of such viruses; and the warning was published after You:
i. make Your Qualifying Travel Purchase in the case of a claim for Cancellation; or
ii. started Your Trip in the case of a claim for Curtailment or Trip Change;
We will pay up to the maximum relevant cover section limit inclusive of sub-limits as shown in the Schedule of Benefits for:
a. non-refundable and unused:
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iii. travel and accommodation costs that You have paid in advance;
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