Travel insurance claims, Qantas cancellations and coronavirus: What you need to know
Qantas is slashing flights as the coronavirus continues to rattle the air travel industry. Here’s what you need to do if you’re affected.
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Qantas has slashed the capacity of its international flights by almost a quarter for the next six months due to the coronavirus impact.
Chief executive Alan Joyce said there had been a sharp drop in bookings over the last fortnight for international flights.
He said the business was trying to reduce costs while giving certainty to customers.
The changes reduce capacity by 23 per cent compared to the same period last year.
The reduced flight schedule means more than 2,000 workers will not be needed. To avoid redundancies, staff will be asked to take leave.
This is what it means, and what consumers can do if their flight is affected.
HOW WILL THE CHANGES AFFECT FLIGHTS
There will be fewer Qantas and Jetstar flights, and smaller planes, travelling to Asia, the US, the UK and New Zealand, until mid-September as fewer people want to fly.
The changes reduce capacity by 23 per cent compared to the same period last year.
The decision means 38 planes will be grounded.
Qantas has also reduced domestic flight capacity by five per cent.
Mr Joyce said he expected lower demand to continue for the next several months.
WHICH FLIGHTS ARE MOST AFFECTED
Flights to Asia are most affected. Capacity for this continent will be reduced by 31 per cent.
The US is the next-most affected destination - a 19 per cent cut.
You can find a full list of affected flights below.
WHAT IF MY FLIGHT IS CANCELLED OR RESCHEDULED?
Qantas and Jetstar say they will contact customers affected by these changes in the coming week.
If you used a travel agent to book your flights, you will be contacted by them.
Qantas Group says for customers flying internationally, it is most likely that they will be offered an alternative flight via another capital city or partner airline, or an alternative day.
Disruption to domestic routes is expected to be minimal.
Canstar money expert Effie Zahos said what Qantas and Jetstar had offered was “very generous” in the context of the coronavirus outbreak - an event outside their control.
She warned consumers that what the airlines were offering was applicable for those who booked directly through them, and what travel agents put on the table could be different.
WHAT SHOULD MY NEXT STEPS BE IN THE EVENT OF A FLIGHT CANCELLATION OR RESCHEDULING?
Compare Travel Insurance director Natalie Ball said your next steps would depend on how you booked your transport and accommodation.
“If you booked through a travel agent or a third-party website, you should contact your booking agent directly regarding the best option in cancelling or altering your trip,” she said.
“In addition to airlines, hotel chains are doing their part to contain the coronavirus outbreak as well as lessen the impact that the outbreak has on travellers. A growing number of hotel providers have announced free cancellations so it’s vital to talk to your accommodation provider ASAP.”
She encouraged travellers to contact their travel providers directly before making a claim through their insurance.
“In the event of any claim, it is your duty to do whatever you can to reduce your claim costs. Make sure you’ve spoken to your travel providers about your refund or rebooking options before contacting your insurer to expedite your claim.”
“We would advise making sure that your contact details are also up-to-date with your airline, so you can be kept in the loop if anything changes.”
Ms Zahos recommended making enquiries through Qantas and Jetstar websites at this point in time as you were “likely to get a response more quickly”.
WHAT IF I MAKE A BOOKING
Qantas and Jetstar will waive change fees for new international bookings made from today until the end of March if customers change their travel plans. Changes need to be made at least three days before the date of travel.
This applies to travel commencing up to June 30, 2020, and is limited to one free change per customer.
However, customers will need to pay any fare difference.
Ms Ball said: “As the situation is constantly evolving, it’s a good idea when making new travel bookings to be prepared for change and stick with airlines that have more flexible cancellation and change policies”.
She said it was essential travellers did their due diligence and understand what your travel insurance will cover you for amid the outbreak.
“You can often pay for your accommodation after your stay, so avoid paying for all your expenses upfront. It’s also worth pointing that you may have different rights for compensation or reimbursement when booking discount airfares instead of a full fare, so check the terms on your booking and invest in refundable, flexible tickets,” she said.
Founder of comparison site Creditcard.com.au, Roland Bleyer, said: “If you have a credit card, I suggest purchasing flights and travel through your card, so you have additional layers of buyer protection - particularly given the changing nature of things.”
SHOULD I CANCEL MY UPCOMING TRIP AS THE VIRUS CONTINUES TO SPREAD?
Mr Bleyer said health and age should be a major factor in any cancellation decision.
“My advice is - if you can travel, do it,” he said.
“If you are not in the high risk age or don’t have respiratory problems, then it may be the best time to travel. Hotels are giving upgrades and many hotspots are much more peaceful than usual. This can make travel even better.”
He recommended cancelling any trips booked to mainland China, Iran, Northern Italy or South Korea.
Based on health and age, Mr Bleyer suggested reconsidering travel to Hong Kong, Italy, Hapan, Singapore and Thailand.
Ms Zahos recommended if you were deciding whether to cancel a trip to first contact your accommodation provider.
“Look at what options you have. For example, can you reschedule it for the same period next year, or can you get a voucher so you don’t lose your money,” she said.
“Then contact your airline, because what you’ll find is a lot of airlines is that customers have already cancelled and numbers are low. That can mean it’s not economically viable to have the plane in the sky”.
It comes as the Australian government followed the US in advising its citizens to “reconsider” taking an overseas cruise as the coronavirus outbreak continues to spread around the world.
“Australians, particularly those with underlying health concerns should reconsider taking an overseas cruise at this time due to COVID-19,” the Department of Foreign Affairs and Trade said on it SmartTraveller website.
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Emirates has also announced it will temporarily suspend all flights between Abu Dhabi and the Kingdom of Saudi Arabia amid the COVID-19 outbreak. The Middle Eastern airline operates up to 12 flights between the two locations.
For passengers impacted by the flight cancellations, procedures are in place for fare refunds or for flight changes when services resume.
WHICH TRAVEL INSURANCE COMPANIES COVER CORONAVIRUS
Only a third of travel insurance companies are offering Australians any kind of cover for claims relating to coronavirus.
An audit of 32 product disclosure statements by Finder found that 14 companies specifically exclude claims related to epidemics or pandemics.
Eight insurers did not directly explain how they would treat the situation, while ten included some cover.
SEE THE LIST OF COMPANIES BELOW
It comes as the Australian Financial Complaints Authority (AFCA) told News Corp complaints had started rolling in about travel insurers rejecting coronavirus-related claims.
At least a dozen brands have clamped down on claims amid the viral outbreak, which many insurers deemed a “known event” around January 20.
Fastcover said in a statement: “Our policies contain a General Exclusion relating to epidemics and pandemics. This applies to all policies regardless when purchased.
“It also applies to all countries, including countries where DFAT has not yet issued a Coronavirus (2019-nCoV) travel warning related.”
Insurer 1Cover had a similarly strict stance, saying “it is unlikely that any claim will be covered if it relates to the coronavirus”.
“However, we will assess each claim based on its individual facts and circumstances and policy terms and conditions,” 1Cover said.
Cover More – which provides travel insurance for NRMA, SGIO and SGIC – said it would not cover items including trip cancellation or amendment claims, “caused by or arising from an epidemic, pandemic or outbreak of an infectious disease”.
However, it said cover may be available up to specified benefit limits if travellers contracted coronavirus and incurred medical expenses or associated additional expenses.
Canstar money expert Effie Zahos labelled travel insurance policies a “minefield”.
“Generally speaking, about half of insurers cover for medical expenses relating to an outbreak, epidemic or pandemic,” she said.
“Cover More is one example where if you booked your holiday before their announcement was made, then you would likely be covered for medical expenses but not any other claims relating to the coronavirus.
“Less than half cover for cancellation expenses.
“When people purchase policies they generally have an option to pay more in case you change your mind.
“A lot of people are stuck now because they will be changing their mind and realising they’re not covered for that part.”
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Ms Zahos said if travellers had paid for parts of their trip on credit card, that could act as a back-up.
“You may have insurance there … if you’ve booked a hotel and it shuts down amid the outbreak, then they haven’t delivered a service and you might be able to get some compensation,” she said.
She criticised insurers for their differing stance on coronavirus-related claims, saying there needed to be more consistency.
“It should be simple. For any type of product, you want to buy something and know that the boundaries don’t change,” she said.
“You expect decency and fairness in any type of contract. There shouldn’t be moving parts to it.”
According to the Compare Travel Insurance website, “‘fear of getting sick’ or ‘change of mind’ are not covered reasons to cancel under a standard travel insurance policy”.
“You would be in a better position to recover any costs with providers if the cancellations are outside of your control,” the website states.
“For example, if your airline is no longer flying to a particular destination and cancels your flight you’re likely to be entitled to a full refund.
“If you cancel your flight because you don’t want to go, you’ll probably be left out-of-pocket. “It’s worth contacting individual airlines, hotels and service providers, as some are offering penalty-free options to change bookings and may offer refunds.”
It also states that many policies have general exclusions relating to epidemics, pandemics and outbreaks of infectious disease, which can apply regardless of when you purchased your policy.
“Some travel insurers have indicated that there is cancellation coverage (for coronavirus) subject to when the outbreak was known, whereas some travel insurers have indicated that there is simply no cover at all,” it confirmed.
AFCA’s Lead Ombudsman of Insurance, John Price, said the authority had received a small number of complaints about the denial of travel insurance claims that relate to coronavirus.
“Before travelling or purchasing travel insurance, consumers should check with their insurance provider about what their policy covers, as policies differ,” he said.
“If a consumer has cancelled their travel arrangements they should talk to their travel agent, airline and accommodation providers first about a refund.
“Following that, they should contact their insurer about making a claim.
“Each claim should be judged on its merits and based on a fair interpretation of the travel insurance policy.
“AFCA expects insurers to respond quickly and efficiently to insurance claims.
“Consumers can come to AFCA if they are unhappy with the outcome of their claim and are unable to resolve this directly with their insurer.”
There have now been more than 80,000 cases of the coronavirus – named COVID-19 – worldwide, with the majority of them in China. About 3000 people have died.
Australia has had 29 confirmed cases, where 15 have been cleared of infection.
However, if you travel to an affected country and contract coronavirus, Compare Travel Insurance states in “most instances medical costs would be covered”.
“Your travel insurer is likely to do everything they can to assist you,” it stated.
“This not only includes covering the costs for medical treatment but also providing support and updates to family members where appropriate.”
For the latest government travel advice on coronavirus and safe travel destinations, visit www.smartraveller.gov.au
Originally published as Travel insurance claims, Qantas cancellations and coronavirus: What you need to know
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