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.
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.