“So, no” response leads to complaint

When, because of travel restrictions, a woman asked her insurer if she was covered for the cost of her extended car rental, the response was confusing. This led to a complaint to the IFSO Scheme.

“So, no” response leads to complaint

Ms K arranged insurance for her trip to Australia in June 2021.

Unfortunately, while on the trip, Ms K’s return flight was cancelled due to the New Zealand government restrictions on travel from Queensland. As a result, Ms K was unable to return to New Zealand until mid-July 2021.

Before Ms K returned to New Zealand, she telephoned the insurer to ask if there would be cover under the insurance policy. She made a claim for the additional costs of the trip, due to the delay in returning to New Zealand.

The insurer declined the claim on the basis that it wasn’t covered by the policy. Additionally, it believed that the policy exclusion for government intervention applied.

Ms K complained to the IFSO Scheme. She said, when she phoned the insurer, she had told it she wanted to keep her rental car for the unanticipated extra time added to her trip. Ms K said she’d return it if it wasn’t covered by the insurer. Ms K asked, “is there a chance it won’t be paid for” and the response was “So, no”, but then the insurer proceeded to mention a cross border exclusion.

The IFSO Scheme found that it was clear from the call Ms K had only heard the “So, no”, meaning the cost of the rental car would be covered, a somewhat confusing response from the insurer.

After discussion with the insurer, it offered to settle the claim for NZ$666.31. Ms K accepted this amount in full and final settlement of the claim.

Complaint settled

In our experience, consumers don’t understand how policy exclusions work. They are often taken by surprise when they find that their cover is limited in certain circumstances, or not available in others, because an exclusion applies.

See the full case study.