Zurich has successfully defended a complaint lodged by a traveller who believed he was entitled to claim for losses incurred from buying a new return ticket when the airline he was booked to fly with in March went into administration.

The Australian Financial Complaints Authority (AFCA) ruled the insurer has made a case for denying the claim, referring to the exclusions and wordings contained in the travel insurance policy’s product disclosure statement (PDS).

A section on general exclusions states the policy will not cover for claims resulting from the insolvency of airline or other carrier, travel agent and tour operators.

And while the policy covers for additional expenses, the PDS outlined a number of scenarios where such claims would not be accepted. These include losses caused directly or indirectly by pandemics and outbreaks of an infectious disease or mutation of viruses.

The traveller in his submission to AFCA said he had no choice but to make alternative arrangements when his connecting flight in Amsterdam on March 17 was cancelled. He only realised the airline was in administration when he checked in for his flight.

He said he was not able to contact his agent or any airlines at that time as every customer number he called was busy because of the pandemic, which by that time had led to widespread flight disruptions globally.

The traveller also said he was anxious to return home quickly because of the travel warnings issued by the Australian Government.

He says the cause of his loss was therefore due to his travel agent not providing a service and wants Zurich to indemnify the costs of his replacement flight.

But AFCA sees it differently, ruling the additional costs incurred by the traveller arose from the airline’s insolvency.

“Whilst the complainant says it was due to his travel agent’s actions, the claim would not have occurred if not for the airline cancelling the flight due to going into administration,” AFCA said.

“The insurer is entitled to decline the claim and is not required to take any further action.”

Click here for the determination.