QLD Travel Insurance Claim - Any Recourse?

[Luke O'Flaherty]

I am claiming costs associated with losing my passport in the US against an Australian travel insurance policy.

I had to travel to a US Consulate outside of my planned itinerary to obtain an emergency passport. Since I was flying out of the US the day after minimum passport processing (2 days after application submission), I had no choice other than to fly to the city from which I was departing, which also had an Australian Consulate. My initial planned travel was to be in that city the day before departure, so additional travel arrangements had to be made. I initially claimed the cost of this travel as "reconnection of planned travel".

However, although the policy did cover such costs, it only did so for certain instances of delayed travel, where losing passport was not one of them. Since the policy did not cover my circumstance to reconnect planned travel, I thought I could claim traveling earlier to the city of departure as part of the cost for obtaining the emergency passport, which is covered in the policy.

The Insurance company has denied my amendment.

What is my recourse, if any?

 

[Rob Legat - SBPL]

I'm not an expert in insurance law, so this is going off general principles.

There's probably not a lot of recourse you can have, based on the exclusion under your insurance policy. Law uses a 'but for' test in these circumstances to determine whether your losses flow on from the relevant event. It's applied like this: You wouldn't have changed your travel plans but for the fact that you lost your passport. In other words, if you hadn't lost your passport you wouldn't have changed your itinerary. Then, because you're not covered for the loss of your passport you're likewise not covered for the changes that necessarily flow from that loss.

 

[Luke O'Flaherty]

..because you're not covered for the loss of your passport you're likewise not covered for the changes that necessarily flow from that loss.

Thanks for your response Rob, but it seems that it comes from my question being unclear.

I was indeed covered for loss of passport, that being costs associated with gaining a replacement, including travel to the destination (Consulate) to get one. As mentioned in my OP, this destination was also my port of departure, hence my claim for "reconnection of planned travel", a claim I later found to be invalid. Therefore, I amended my claim to included the said "travel to the destination" to be part of the costs associated with obtaining a replacement passport, which is valid.

However, the Insurance Company has denied this amendment, stating that I presented documentary evidence that supports the event (travel to the destination) as "reconnection of planned travel". My question stems from the notion that the event had a dual purpose, one being claimable, the other not. Thus, my question is, can the Insurance Company select one of these dual purposes and exclude the other?

 

[Rob Legat - SBPL]

Thanks for confirming. So, if I'm reading it correctly, this boils down to the insurance company refusing to approve your claim on the basis that you put one description of the basis of your claim in your claim request instead of another.

I would think that if the events that occurred give rise to a valid claim, and the problem is simply the wrong characterisation of the events (in a case where the event itself is covered in your circumstances), then the failure to approve your claim is likely to be unfair.

Most insurers are members of an ombudsman's scheme, probably the Financial Ombudsman Service (FOS). Lodge a complaint with the insurer, which they must acknowledge and deal with. It wouldn't hurt to ask for a copy of their dispute resolution policy first, as that will give you some idea of how to frame your complaint. If they don't deal with is satisfactorily within the relevant time frame (usually 45 days), you can then refer the complaint to their external dispute resolution scheme provider (that would be FOS, if they're a member of that scheme). Any decision made by the EDR provider is binding on the insurer, and is not binding on you. The whole process is completely free of charge to you.

If you go to FOS' website (www.fos.org.au), there's a box on the right for "Find a Financial Services Provider" where you can lookup and see if they are a member. Make sure you complain to the insurer first, however, as the EDR scheme will automatically refer it back to the insurer if you don't.

 

[Luke O'Flaherty]

I would think that if the events that occurred give rise to a valid claim, and the problem is simply the wrong characterisation of the events (in a case where the event itself is covered in your circumstances), then the failure to approve your claim is likely to be unfair.

Thank you for confirming my naive suspicions with a professional opinion, as well as guidance toward my next step.