A traveller who was forced to cancel his trip early due to his father’s death overseas has lost his claims dispute. 

The complainant lodged a claim under his travel policy, which offers cover for lost expenses due to trip disruptions, in October last year, following his father’s sudden death in Spain.

However, Mitsui Sumitomo Insurance declined the claim, saying that its policy only covered unexpected death events to relatives if they resided in Australia and were in the country at the time of death. The insured’s father had not lived in Australia. 

The policyholder says the restriction of cover is unfair and that “any reasonable person would expect the death of a parent to be covered by a travel insurance policy”. 

But the Australian Financial Complaints Authority (AFCA) backed the insurer’s decision saying there is no dispute that the policy terms had laid out specifications of cover in the event of a relative’s death, which had not been applicable in this case.

AFCA says the claimant had been clearly informed of the policy’s conditions and did not have to accept the policy if he had been unhappy with it. 

“I acknowledge the complainant has suffered an unexpected loss which disrupted his holiday. I extend sincere condolences to the complainant for the loss of his father,” AFCA said,

“However, the policy only provides cover for expenses incurred due to the death of a relative where this occurs, and they reside, in Australia.”

“If the complainant considered the scope of the policy was too restrictive, it was open to him to seek alternative insurance that better suited his circumstances.”

AFCA acknowledges that the claimant had appealed to provisions in the Australian Securities and Investments Commission Act 2001 (ASIC Act) relating to unfair contract terms but says it was beyond the scope of its jurisdiction.

“The ASIC Act allows a court to declare unfair terms in standard form consumer contracts void in certain circumstances,” AFCA said.

“AFCA is not a court. However, AFCA must consider what is fair in all the circumstances. This includes considering if the policy terms are fair.”

Click here for the ruling.