Consumer NZ takes aim at travel insurance
Less than half of New Zealand’s travel insurance companies offer full refunds on travel cancelled due to the coronavirus pandemic, a Consumer NZ analysis has found.
Of the 28 policies reviewed by Consumer, just 11 companies offered full refunds.
A further three companies offered refunds on a case-tocase basis.
Consumer NZ chief executive Jon Duffy said blanket policies from insurers refusing refunds for useless policies were unfair.
‘‘Consumers can’t travel and insurers aren’t covering any risk, they shouldn’t be profiting from consumers’ misfortune,’’ Duffy said.
New Zealanders needed to be aware of the individual refund policies of insurers, he said.
‘‘There are insurers out there that are doing the right thing and refunding customers in full, but there are others that are only providing credits or charging penalty fees as high as 25 per cent of the original premium to process a refund,’’ he said.
‘‘These fees are exorbitant and are unlikely to reflect the insurer’s actual costs for processing a refund. Again, we think it is unfair that insurers should be able to profit from consumers’ misfortune.’’
Duffy said the insurance industry had lobbied for wideranging exceptions to provisions in the Fair Trading Act.
‘‘The Fair Trading Act only allows the Commerce Commission to apply to the courts for declarations that contracts are unfair, but since 2015 only one unfair contract case has made it through the courts,’’ he said.
‘‘We think the insurance industry should be subject to the same rules as other sectors and consumers should be able to take their own cases to court or the Disputes Tribunal to argue contract terms.’’
The Insurance Council of New Zealand has been approached for comment.
The question of refunds for travel booked prior to the spread of Covid-19 has been an issue for a number of companies.
Air New Zealand has faced pressure from Consumer NZ to refund passengers who are unable to travel due to Covid-19.