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VIC Travel Insurance - Legal to Send Insurance that Can't be Claimed?

Discussion in 'Insurance Law Forum' started by J Rockbelly, 8 September 2015.

  1. J Rockbelly

    J Rockbelly Member

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    I recently had a trip to Bali canceled due to the eruption of a volcano. I had travel insurance and claimed for the cost of flights, and accommodation.

    My policy included insurance against cancellation of flight due to natural disaster, and this was a large part of why I chose this policy. However, the insurer rejected my claim on the basis that Bali has a history of natural disaster, which was listed in an exclusion clause.

    This is all fine, and I'm not really questioning the decision.

    But I am curious about the legality of the policy. As far as I can see there is no way possible to claim against natural disaster under this policy. I have purchased insurance against natural disaster for a trip to a location with a history of natural disaster, therefor I can't make a claim for the reason of natural disaster.

    It's like buying car insurance on the condition that I don't own a car.

    Is it legal to sell travel insurance that can never be claimed against?

    thanks
     
  2. Sophea

    Sophea Well-Known Member

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    Hi J Rockbelly,

    If something is expressly listed as an exclusion on the policy then the insurer has every right to decline the claim as you are aware and they are within their rights to do this. Insurance policies must be read cover to cover - especially exclusions - to ensure that they are fit for what you want to be covered for.

    And the natural disaster feature of the policy can be claimed on in most cases, just not in excluded places such as Bali. For example you can likely purchase the same policy to travel to Malaysia or Timor Leste - which more than likely are not the subject of specific exclusions. If you were travelling to one of those places and a natural disaster interrupted your trip then you could claim under that provision of the policy. Therefore there is a possible way of claiming under natural disaster on the policy, just not as far as they involve Bali.
     
  3. J Rockbelly

    J Rockbelly Member

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    hi Sophea

    Thanks for the reply, it also makes sense.

    However, the plot thickens. I've been in contact with the insurer and they directed me to a clause in the Product Disclosure Statement (PDS) which excludes claims for "extraordinary natural disasters". I reviewed the PDS at length before buying the policy, however it seems that the version they have published on their website has no mention of "extraordinary natural disasters". Just to make sure I looked at all of the available PDS for all of their products, none of them include this clause.

    Now I'm trying to work through with them which is the correct document, and when was it made available to me.

    Feels like the old bait and switch.

     
  4. Sophea

    Sophea Well-Known Member

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    Well that may indeed change things for you. An exclusion of that nature - i.e. rendering cover void to a certain location must be stated explicitly to you. You can only agree to what you were informed of, and if you were not informed of major exclusions in the policy then you didn't agree to them and they would not form a term of the contract.

    Let us know how you go.
     
  5. J Rockbelly

    J Rockbelly Member

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    Will do.... although I'm not expecting a speedy resolution.
     

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