Cafe Insurance Online :: News
SHARE

Share this news item!

AFCA Rejects Traveller's Insurer Claim for Alternative Flight Costs

AFCA Rejects Traveller's Insurer Claim for Alternative Flight Costs

AFCA Rejects Traveller's Insurer Claim for Alternative Flight Costs?w=400
An Australian travel insurance policyholder faced disappointment as the Australian Financial Complaints Authority (AFCA) denied their claim for reimbursement of costs incurred due to changing travel plans amid threats of a pilot strike.
The traveller, who rearranged his flights from Sydney to Vancouver and subsequently to Toronto, had hoped his insurer, AIG Australia, would cover the $5,576 expenses for the rebooked flights and additional accommodation.

Initially scheduled to fly on September 18, the policyholder was informed of possible disruptions due to a planned strike. Although the airline assured him that service would continue as normal unless the strike impacted schedules starting September 15, the traveller chose to fly out two days earlier to avoid potential cancellations. Believing this decision would be covered, he contacted AIG before lodging his claim. However, AIG clarified its policy only covers additional expenses if a traveller is stranded or misses a connection—circumstances the traveller did not encounter.

This ruling highlights the need for consumers to thoroughly understand the terms of their travel insurance policies, especially regarding what constitutes a "covered event." In this case, the traveller acted out of precaution, but without a qualifying event under the policy definitions, the insurer was under no obligation to compensate for the traveller’s proactive change. This case sets a precedent for how claims will be interpreted when travel disruptions are anticipated but do not ultimately occur.

Travel insurers and policyholders alike should take heed of this decision. It's crucial for insurers to ensure their policy terms are clearly communicated, reducing the potential for misunderstandings such as this. Meanwhile, consumers are advised to review their policies in detail before trips and engage with their insurers for clarifications about coverage scopes. As AFCA continues to deal with rising disputes, especially in the travel sector, this case underscores the need for both clarity and caution when planning trips amidst unguaranteed travel uncertainties.

Published:Friday, 25th Jul 2025
Source: Paige Estritori

Share this news item:

Insurance News

Kell to Lead Comprehensive Review of Australia's Life Insurance Code Kell to Lead Comprehensive Review of Australia's Life Insurance Code
01 Aug 2025: Paige Estritori

Starting on October 1, a comprehensive review of the voluntary Life Insurance Code of Practice will commence, with a focus on assessing the effectiveness of revisions made to its regulations and standards in 2023. The Council of Australian Life Insurers (CALI) has appointed Peter Kell to lead this independent review and deliver the final report by June 30 next year. - read more
AFCA Sides with Insurer in Pet Injury Dispute AFCA Sides with Insurer in Pet Injury Dispute
31 Jul 2025: Paige Estritori

The Australian Financial Complaints Authority (AFCA) has upheld PetSure's decision to cap their payout at $2,600 for a dog's medical costs, settling a dispute over pet insurance claims. The dog's accidental injury involved a ruptured cranial cruciate ligament, requiring approximately $6,500 in veterinary care, including surgery. Although the owners' claim was initially accepted, it was limited under the policy's annual sublimit for cruciate ligament conditions. - read more
Reviving Australia's Troubled Insurance Industry: Opportunities and Challenges Reviving Australia's Troubled Insurance Industry: Opportunities and Challenges
30 Jul 2025: Paige Estritori

Australia's retail life insurance sector is facing significant challenges despite generating approximately $9.4 billion in annual premiums. Upon closer examination, it's evident that this industry is under strain. Growth is primarily driven by price increases rather than the addition of new clients, signalling concerns for long-term sustainability. New business growth hovers around 8-9% annually, not enough to adequately bolster the sector. - read more
NSW Government Warns of Financial Impact from Stall in Workers' Compensation Reform NSW Government Warns of Financial Impact from Stall in Workers' Compensation Reform
29 Jul 2025: Paige Estritori

The New South Wales government has issued a stark warning regarding potential financial consequences if proposed reforms to workplace mental injury laws are delayed further. As an upper house committee gathers to discuss these changes, Treasurer Daniel Mookhey highlights the urgency, stating that setbacks will result in increased premiums. - read more
AFCA Rejects Traveller's Insurer Claim for Alternative Flight Costs AFCA Rejects Traveller's Insurer Claim for Alternative Flight Costs
25 Jul 2025: Paige Estritori

An Australian travel insurance policyholder faced disappointment as the Australian Financial Complaints Authority (AFCA) denied their claim for reimbursement of costs incurred due to changing travel plans amid threats of a pilot strike. The traveller, who rearranged his flights from Sydney to Vancouver and subsequently to Toronto, had hoped his insurer, AIG Australia, would cover the $5,576 expenses for the rebooked flights and additional accommodation. - read more


Cafe Insurance Articles

Accidents Happen: How Public Liability Insurance Safeguards Your Cafe Accidents Happen: How Public Liability Insurance Safeguards Your Cafe
Running a cafe can be incredibly rewarding, but it comes with its own set of challenges. One of these challenges is managing the various risks that can arise, especially when dealing with the public daily. This is where public liability insurance becomes an essential part of your business toolkit. It's designed to protect your cafe from the financial fallout of accidents that can occur on your premises, which is crucial for safeguarding your business’s financial health. - read more
Understanding Business Interruption Insurance for Cafes Understanding Business Interruption Insurance for Cafes
Business interruption insurance is a specialized type of coverage designed to protect businesses from financial losses due to unavoidable disruptions. Whether it's a natural disaster, a burst pipe, or a local emergency, this insurance helps ensure that the business can continue to meet its financial obligations during downtime. - read more
How to Choose the Right Insurance for Your Coffee Shop How to Choose the Right Insurance for Your Coffee Shop
Running a coffee shop involves more than simply brewing the perfect cup of coffee. It requires a sound understanding of the business's risks and a strategic approach to managing them. Choosing the right insurance coverage is crucial for safeguarding your investment. - read more
The Importance of Disability Income Protection Programs for Cafe Owners The Importance of Disability Income Protection Programs for Cafe Owners
Running a cafe is more than just a business; it’s a passion for many. However, for cafe owners, the risk of an injury or illness that could interrupt their ability to work is a genuine concern. Disability income protection is crucial as it provides financial security if you're unable to earn an income due to health issues. - read more
Understanding Cafe Insurance: What Every Owner Needs to Know Understanding Cafe Insurance: What Every Owner Needs to Know
Running a cafe can be a dream come true, but it's not without its challenges. One of the most critical aspects of managing a cafe is ensuring that it's adequately insured. Cafe owners in Australia face various risks, from equipment breakdowns to customer accidents. Without proper insurance coverage, these incidents can translate into significant financial losses. Insurance acts as a safety net, offering protection against unforeseen events and ensuring the business can recover swiftly. - read more


Your free cafe insurance quote comparison starts here!
First Name:
Postcode:

All quotes are provided free and without obligation. We respect your privacy.

Knowledgebase
Depreciation:
The reduction in the value of an asset over time, used in insurance to calculate the actual cash value of property.