A travel insurer has been told to pay a woman's business-class flights home, her travel companion's costs and $5,000 for inconvenience, after it suggested she fly with a different airline and not tell it about her medical conditions.
The Insurance & Financial Services Ombudsman (IFSO) Scheme released the decision on 12 November. It did not name the insurer. The woman is called Cara in its release, which is not her real name.
What happened?
Cara became seriously ill in Bali and could not fly home as planned. Two doctors told her she needed a companion to travel, and Air New Zealand's medical team said she would need a nurse or doctor as a medical escort.
A representative on the insurer's emergency phone line told her she was fit to travel alone and would not be covered for an escort. Because Air New Zealand would not carry her without one, the insurer suggested she book with another airline without telling it about her conditions. It offered to cover a business-class seat for her, but not a seat for a companion.
Cara asked a friend, a former paramedic, to fly to Bali and bring her home. She had a medical emergency on the flight to Sydney and was admitted to hospital there, then had to book new flights to New Zealand for both of them.
The insurer only paid part of her claim: the price of the Economy Skycouch she had originally booked, half of what it considered shared costs, and nothing for her friend's flights or the new flights from Sydney.
What did the ombudsman decide?
The IFSO Scheme found the medical evidence supported her need for a companion. Business class was reasonable because she had booked a Skycouch so she could lie flat, and the insurer itself had suggested business class. The insurer had to cover the companion's business-class fare and the flights from Sydney to Christchurch.
It went further. The scheme found the insurer had acted in bad faith, materially breached its fair conduct obligations under the Financial Markets Conduct Act, and failed to provide its service with reasonable care and skill under the Consumer Guarantees Act.
"This directly risked Cara's health in order to reduce costs," Ombudsman Karen Stevens said.
I'm flying home for Christmas. What should I check?
Many families are booking trips to see relatives in China, India, the Philippines and elsewhere over summer. The IFSO Scheme's travel insurance tips include:
- Buy insurance when you book. Cancellation cover is more likely to apply if something goes wrong later. Cover bought after a warning about an event such as a volcanic eruption usually won't cover that event.
- Read the policy. Look for exclusions and limits, including age limits and trip-length limits on credit card insurance.
- Tell the insurer about pre-existing conditions. Conditions or symptoms you had before travelling are usually excluded unless the insurer has accepted them in writing, sometimes for an extra premium.
- Know your 24-hour emergency number. It should be in your policy documents.
Other disputes reported by RNZ this week show what policies often don't cover. A traveller who lost his passport was refused costs for two extra days overseas, because his policy's disruption cover applied to delayed, cancelled or overbooked flights. Another woman had no credit card cover because she had not bought a return ticket before leaving.
What if I get sick while away?
The Cara case points to some practical steps:
- Ask your doctors and the airline to put their advice in writing, especially about whether you need an escort.
- Note the time, name and advice from every call with the insurer's emergency line.
- Do not hide a medical condition from an airline. The ombudsman said the insurer's suggestion to do so put the traveller's health at risk.
- Keep every receipt, including for anyone who travels to help you.
How do I complain about an insurer?
First, complain to the insurer. The IFSO Scheme says providers have two months to resolve a complaint. If it is not sorted by then, or the insurer says it cannot be resolved (called "deadlock"), you can take it to the scheme. Its service is free.
You can contact the IFSO Scheme on 0800 888 202 or info@ifso.nz. It can arrange a phone interpreter and has information about its service in seven languages, including Simplified and Traditional Chinese, Hindi and Korean.
Not every insurer belongs to the IFSO Scheme. Others use schemes such as Financial Services Complaints Ltd (FSCL). The IFSO Scheme says you can ask your provider, call it, or search the Financial Service Providers Register to find the right one.
If you are still planning a trip, our earlier piece looks at what is pushing up Christmas airfares this year.
