20jun travel insurance refunds hero
Research report
23 June 2020

Travel insurance: which companies are providing refunds?

Some travel insurers are charging steep fees for policies cancelled due to Covid-19.

Thousands of Kiwis have been left with insurance policies they can’t use as Covid-19 has stymied overseas travel plans.

However, only 11 of 28 insurers we reviewed are offering affected customers full refunds of their travel insurance premiums. A further three companies will consider refunds but only on a “case-by-case basis”. Refunds are available from these insurers, provided the customer hasn’t made a claim on their policy.

Most of the rest are only providing credits or charging fees to process refund requests. If you bought travel insurance from Air New Zealand, AMI, Cover-More, Flight Centre, State or Westpac you’ll lose 25% of your premium if you want a refund.

Cancellation terms unfair

Travel insurance can be a pricey purchase. Depending on where you’re travelling and the length of your trip, you could be paying hundreds of dollars for cover.

After buying insurance, you normally have a cooling-off period when you can cancel and get a refund. Outside this period, many insurers won’t offer refunds if you no longer need the policy. We think that’s unfair: if you’re not travelling and the company isn’t covering any risk, then a blanket “no refund” policy isn’t justified.

Some insurers have made exceptions due to the Covid-19 pandemic and are providing refunds. In our view, that’s what all companies should be doing.

Travel insurers’ Covid-19 refund policies

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Mark B.
01 Jul 2020
AIG Travel Insurance refund

We recently received a full refund for a $400 policy with AIG after our Emirates flight to Europe was cancelled. It took just 5 minutes on the phone. A very pleasant surprise - I was expecting it to be harder :)

Brendan P.
29 Jun 2020
Air Nz

We lost over $10k in Air NZ flights. Credits have been offered but they have gone to the ticketed names not the buyer of the flights. I have lost my job after level 4 finished. Partial refund offered but with a fee. We need our cash, and future situations of life and employment may not allow us all to travel together as we had planned.. Mr Duff can you help please

Consumer staff
29 Jun 2020
Re: Air Nz

Hi Brendan,

One of our team will be in touch with you to discuss your options.

Kind regards,
Frank - Consumer NZ staff

Previous member
28 Jun 2020
Travel Insurance NIB

Have been arguing with NIB since March to get our flights with Virgin for about $1300 refunded. Flights to Brisbane were cancelled when Virgin pulled out of NZ and dumped all their 600 NZ staff.
We took out insurance in Oct for flights in June 2020 so well before Covid happened but NIB keep delaying, saying they will get back but never do. There are long delays before anyone answers the phone, emails not answered and finally then asking for more and more evidence that the flight didn’t fly. Virgin are not giving refunds for international flights - only credits for Australian domestic travel. If we ever do get a refund they will take about $200 from the flight cost anyway. Will never use NIB again for travel insurance.

27 Jun 2020
Travel insurance credit

I am getting a refund less 25% and whilst I would like a 100% refund I reasoned to myself that I had had 7 months of cover that I could have claimed against if I had been unable to travel for any other reason than the pandemic so in my case it was probably fair that a 100% refund was not given.

Tony T.
23 Jun 2020
Insurance premium repaid

Tower Insurance cancelled our cover but gave us the choice of a refund or credit of premiums off our next policy. We took it as credit off our house policy.

Julie V
20 Jun 2020
Covermore Insurance covers less

Thank you for this. I will have another go at Covermore. They will not give a refund at all if the reason for not travelling is due to a pandemic or government edict, they say. I even wrote to the Insurance Ombudsman but he was no help.

Lynsie Anne M.
20 Jun 2020
Appalling practice.

it is bad enough some insurance companies are not providing a full refund but I find it truly appalling that some are providing a refund less 25%, For goodness sake if they feel they are justified (I don't think they are) then charge a small flat rate across the board for all refunds. 25% will be a considerable amount on some of the lengthy policies especially on the North American ones. It takes no more effort to process a high value policy than a low value one. 25% is just price gouging.
What happened to "we are all in this together?"

20 Jun 2020
Refunds from Airnz and Southern Cross finally through

It took a just in time jolt from Consumer to get our Southern Cross travel insurance refund as I had tried earlier and was sidelined! Also the refunds for our Airnz tickets came through yesterday for the full amount paid. I am happy to use this later for my husband and I (not limited to one person) when planes fly again. Thank you Consumer for your concerted push on sorting this out.

James C.
20 Jun 2020
Mixed messages

We took out a $300+ Comprehensive policy with 1 Cover for a planned trip to UK. We bought early to ensure any flights we purchased were after the date we paid the premium. When Covid arose and cancellation seemed probable we enquired about cover and cancellation. The reply was simply that as stated in the poloicy there was no cover and cancellation for epidemic/pandemic and no refunds more than 14 days after purchase although there was a statement that cases would be considered individually on request. We were denied refuand but eventuallyoffered a credit valid for around 18 months. Reading the policy document - the (very) small print I eventually found the relevant statements on about page 67 of the policy document. There was very little aboard what they did cover and a lot about what they would not. The information was possibly ambiguous and not too easy to follow. Very disappointing. Of all the companies we dealt with for the holiday , 1 Cover is the only one refusing a refund. The airlines, hotels, car rental and car insurance companies all agreed cancellation and refunded as appropriate (still waiting for the money from the airline). Hopefully we'll get to use the credit but I won't use them again after then.

James C.
20 Jun 2020
Cover for cancelled flights

Great work Consumer NZ. Would also be good to know which policies cover cancelled travel. Perhaps you can analyse this too?

I had cover with Allianz (via ANZ Visa gold card) and the general exclusion clause says NO COVER if airline cancellation is a result of Government action.
Now that this type of pandemic risk is real, there is much less value in some of these travel insurance policies with such broad exclusions.

I won't be using Allianz or relying on credit card travel insurance cover in future.

Sally H.
21 Jun 2020
You Travel Allianz Travel Insurance

We are still waiting on a refund from our Travel Agent for insurance cover that never took place.We have been waiting for 3 months.These delays can't be justified.Did you eventually get any money at all back from Allianz?
Sally H

catherine i.
20 Jun 2020
Keeping some is reasonable

If it was house insurance, paid a year in advance, you sold the house 1/4 through the year, you don’t need 3/4 of it and you get 3/4 refund.
This could be seen as similar. Travellers still had some coverage from time of purchase for cancellations due to death or illness, eg . So some benefit of the policy was already used. It’s therefore reasonable for the insurer to keep some.
Those insurers who refunded 100% were going beyond what would be legally required in order to be kind to affected customers. That’s lovely of them.

27 Jun 2020
Part charge

Exactly. I am getting a refund less 25% as well and whilst I would like a 100% refund I reasoned that I had had 7 months of cover that I could have claimed against if I had been unable to travel for any other reason than the pandemic.