Coronavirus: No refunds for many travellers

Thousands of Australians will lose money spent on expensive overseas holidays because most travel insurers dom’t pay out for pandemics.

Insurance Council of Australia communications manager Lisa Kable says, ‘I wouldn’t start with your travel insurer (to receive a claim). You need to find out what the airline, the tour operator, the cruise operator, the accommodation provider is doing for you’. Picture: Supplied

Thousands of Australians will lose money spent on expensive overseas holidays because most travel insurance policies do not pay out for pandemics.

Most small business owners and workers with income insurance will also not be covered if they are negatively impacted by the crisis.

Insurance Council of Australia communications manager Lisa Kable said most travel insurance policies excluded coverage for health epidemics, after the Morrison government upgraded its overseas advice to “do not travel”.

“I wouldn’t start with your travel insurer (to receive a claim). You need to find out what the airline, the tour operator, the cruise operator, the accommodation provider is doing for you,” Ms Kable said.

“Are they going to refund? Are they postponing? Are they giving you a credit voucher? You need to have all of that information before you ring your travel insurer.

“Most travel insurance policies include a pandemic, epidemic, ­infectious disease exclusion.

“There are dozens and dozens of travel insurance policies out there and everybody’s might be just a little bit different because some people might have a pre-­existing medical condition, some people may have added something.’’

Choice manager Jodi Bird said more than half of insurance policies excluded payouts for travel cancellations because of health epidemics. But he said most policies would cover medical expenses as a result of the coronavirus.

Assistant Treasurer Michael Sukkar said he had spoken directly with insurers to “remind them of their duty to customers”.

“The government will not tolerate businesses who seek to ­exploit the current coronavirus situation to avoid their responsibilities,” Mr Sukkar said.

He encouraged anyone believing they were not receiving their policy entitlements to complain to the Australian Financial Complaints Authority.

Australian Competition & Consumer Commission chairman Rod Sims said travel companies should offer refunds or credit ­because of cancellations.

“Given the exceptional circumstances, the ACCC encourages all businesses to treat consumers fairly and compassionately,” Mr Sims said. “Failure by any business to honour its cancellations or ­refunds policy may constitute misleading conduct under the Australian consumer law.”