First bereavement, then insurance strife
Julie Noel and her husband, Chris, had been on holiday in New York for four hours when she received a phone call to let her know that her mother had died.
Their accommodation was cancelled and flights changed – at a cost of $500 each.
‘‘Everyone said you’ve got insurance.’’
But it was not long before she started to feel that was not so lucky at all. Despite having paid $540 each for full, comprehensive cover with AA Travel, she found she was barely able to claim more than they had paid for the policies.
The insurer wanted two years of her mother’s medical records to determine whether there was a pre-existing condition that would preclude a claim completely.
Then, when it found there was not, Noel was told it would not pay out the $5000 cost of the flights, because they had used them to come home. It would only pay the cost of changing them, plus it’s lucky another $300 towards cancelled accommodation.
She was told that she should have contacted the accommodation providers directly to try to arrange a refund. ‘‘But you’re supposed to put in a claim with them within 14 days and we didn’t because we had no idea.’’
Noel said she had always travelled with insurance but had never before had to claim.
She said she would stick to medical-only cover in future. ‘‘I felt it was a poor experience.’’
Financial Services Complaints Ltd (FSCL) has released its latest annual report, which shows that Noel is not alone in being frustrated by travel insurance.
It recorded a 21 per cent increase in inquiries and complaints over the past year compared to the year before, up to 4365.
Insurance – predominantly travel – remains the largest category of complaints formally investigated by FSCL, followed by consumer credit.
FSCL chief executive Susan Taylor said a common theme underlying the complaints FSCL investigated was a communication breakdown.
‘‘Many complainants say they were not given important information, or that the information they were given was ambiguous or poorly worded. Other times the complainant hasn’t disclosed cer- tain information or simply hasn’t understood the information provided, be that the terms of an insurance policy or a written recommendation or plan.’’
She said the significant increase in complaints was probably due to increasing consumer awareness of external disputes res- olution schemes, not an increase in problematic behaviour from financial services providers.
Noel said in her case, the fine print of her policy backed up the insurer’s stance but that did not reduce her disappointment.
AA Travel said Noel could request a review of the claims decision.
‘‘We completely understand Julie’s need to immediately return home following the unexpected death of her mother and our sympathies are with her and her family.
‘‘Julie’s early return meant there was additional cost to alter her flight home along with the cost of the unused hotels she had booked. AA Travel Insurance covered those costs which, together, were about $1300.
‘‘AA Travel Insurances Comprehensive and Essentials policies cover additional travel and accommodation expenses if the journey can’t be complete because of an unforeseeable circumstance. Julie’s bereavement is included within that.’’