If your travel plans have been affected by the coronavirus pandemic, you may have an insurance policy which covers the financial impact. If you find yourself in a dispute with your insurer about your claim, AFCA can help to resolve it.
Making an insurance claim
- Contact your travel agent, accommodation, airline or other transport company. Many travel service providers are offering penalty-free options for customers to amend or cancel their travel arrangements.
- If you booked your travel with a credit card, you should also contact your credit card company.
- Contact your insurer to find out what your policy covers, and to make a claim.
- If you run into problems during the claim process that you can’t resolve directly with your insurer, contact AFCA.
- The best way to submit a complaint to AFCA is through our easy to use online form. If you have any questions or can't access the form, call our hotline on 1800 337 444.
AFCA's significant event response
On 11 March 2020 the Insurance Council of Australia declared COVID-19 an insurance catastrophe. As a result, AFCA has activated its significant event response plan that identifies and fast-tracks COVID-19 related complaints.
Frequently asked questions
- Can I cancel my travel plans and get my money back?
- Will my insurance cover me for coronavirus?
- Will travel insurance cover coronavirus if I buy a policy now?
- What does it mean now coronavirus has been declared a pandemic?
- How does AFCA approach travel insurance complaints?
- How is the appropriate policy refund calculated?
- Should consumers cancel their longer-term policies?
- Is COVID-19 considered a natural disaster?
Credit Card with Complementary Travel Insurance
- My travel insurance is provided by my credit card, why is the complaint lodged against a different company?
- How do you find out who the insurer is?
Frequently asked questions - Travel Insurance
Q: Can I cancel my travel arrangements due to coronavirus and get my money back?
Many travel service providers are offering penalty-free options for customers to amend or cancel their travel arrangements due to Coronavirus. Before contacting your insurer, we recommend:
- contacting your travel agent or travel provider directly
- contacting your airline directly
- contacting your cruise company directly
- contacting your transport company directly
- contacting your banking institution directly if you booked your travel with a credit card
Q: Will my insurance cover me for COVID-19?
This depends on the terms and conditions of your specific policy, as policies differ. When you purchased the policy will affect if you are covered. Most insurers classified COVID-19 as a ‘known event’ somewhere between 21 to 31 January 2020. If you purchased your travel insurance before coronavirus became a known event, you may be covered. Cut-off dates vary depending on the insurer.
Q: I haven’t booked travel insurance for my upcoming trip. Will travel insurance cover coronavirus if I buy a policy now?
Before travelling or purchasing travel insurance, consumers should check with their insurance provider about what their policy covers, as policies differ. Most travel insurance companies will not cover any COVID-19 related claim if you buy a policy today.
Q: What does it mean now coronavirus has been declared a pandemic?
The World Health Organisation declared Coronavirus a pandemic in March 2020. Governments around the world are putting measures in place to limit the effects of Coronavirus. It’s important not to panic. Many insurance companies exclude epidemics, pandemics and disease, meaning that claims arising from these categories would not be covered. Cover will vary between policies.
Q: How does AFCA approach travel insurance complaints?
AFCA considers each complaint on its own merits and what is a fair interpretation of the travel insurance policy. We will review the wording contained in the certificate of insurance and the product disclosure statement, and consider information provided by both parties. More information about the process we follow.
Q: How is the appropriate policy refund calculated?
General approach to COVID-19 premium refunds
The AFCA methodology below is the standard approach we will apply in most cases. We recognise however that some insurers have their own method of calculating a partial refund that may lead to a different outcome. Where this occurs, we will need to be satisfied the approach is fair in the circumstances.
From the time a travel insurance policy is purchased, some cover is generally provided for cancelation and unforeseen events. This means the policy is providing coverage or already ‘doing work’. For this reason, it is fair for an insurer to retain a portion of the premium in consideration of this cover.
We then consider when the policy is no longer ‘working’. This date may vary depending on the date of policy cancelation, or in instances where people were already travelling, the date they returned to Australia.
Once these dates are known, the time the policy has not ‘worked’ can be calculated by deducting this from the total number of days cover. By multiplying the daily insurance rate by the time the policy has not ‘worked’, the fair premium refund can be calculated.
Determine to total period of cover and divide the premium by the number of days to calculate a daily rate:
Daily rate =
Total number of days cover
Apply the date of cancellation to calculate the number of days the policy is active. Deduct this from the total period of cover to calculate the number of days the policy had no work to do:
Days policy not worked = Total number of days covered - less cancellation date until end of policy
Multiply the daily rate by the number of days to policy had no work to do to calculate the refund:
Premium refund = Daily rate X Days policy not worked
Where travel is curtailed, use return date instead of cancelation date
If a consumer had to cut their travel short, then the date of return should be used as the date the policy ceased to have work to do, and the refund can be calculated as above.
This only applies where the consumer has not got a claim for cancellation fees under the policy.
Where travel is not cancelled before travel ban, fair to use 18 March 2020
If the policy had not been cancelled before the travel ban, and a consumer was not able to leave Australia to commence trip because of the Government announcement on 18 March 2020, then for ease of assessment 18 March 2020 should be used to calculate date for refund where a consumer seeks to cancel policy.
Q: Should consumers cancel their longer-term policies?
Consumers may want to consider keeping policy active
Some consumers with long term policies may want to consider keeping the policy active in the event travel becomes possible later in the year.
Should a request for refunds arise later in the year, AFCA will assess these complaints on a facts basis at that time.
Q: Is COVID-19 considered a natural disaster?
We continue to review information as this becomes available.
However, AFCA notes COVID-19 was declared a disaster by the Australian Taxation Office, which allowed the Australian Disaster Relief Funds to receive tax-deductible donations from 18 March 2020.
We will provide a further update on this issue, along with other frequently asked questions, as required.
Frequently asked questions - complimentary travel insurance with a credit card
Q: My travel insurance is provided by my credit card company, why is the complaint lodged against a different company?
Credit providers may offer complimentary travel insurance with personal credit cards to their customers if they’re eligible.
For the purposes of lodging an AFCA complaint where complementary travel insurance is provided by a credit card provider, the complaint usually needs to be lodged against the insurer (underwriter). This is because they provide the insurance policy issued to the credit card provider. The credit card provider is not the issuer of these policies.
Q: How do you find out who the insurer is?
You can locate who the insurer is by reading the policy (PDS). Often this information is located in the first few pages of the PDS – look for key words such as ‘insurer’, ‘underwriter’ or ‘underwritten’.
If a complainant does not know where their PDS is, we can suggest contacting the credit card provider for these details. Avoid doing a google search for the PDS as it may not be the correct one, as they can vary depending on the circumstances.
- ACCC advice on event and travel cancellations due to COVID-19
- Smart Traveller, Department of Foreign Affairs and Trade
- Insurance Council of Australia – detailed information about how different types of insurance are affected