Zurich’s application of a pandemic exclusion in denying a claim from a man who decided not to proceed with a planned trip to China in February has been upheld by the Australian Financial Complaints Authority (AFCA).

The policyholder held a complimentary card insurance policy which was underwritten by Zurich. He had arranged to travel to various international destinations for a month, setting out from Sydney on January 10.

On January 27 he cancelled flights he had planned to take from London to China, and China to Sydney, and instead arranged to return to Sydney directly from London on February 5.

The policyholder said he made the decision not to travel to China due to coronavirus concerns in the region.

Zurich declined his claim on the basis the policy excluded cover for claims arising from “an epidemic, pandemic or outbreak of a contagious disease or the perceived threat of any of these”.

“The insurer is entitled to decline the claim because it has established there is no cover for cancellation due to concerns about coronavirus,” AFCA says, noting the wording of the general exclusion was “clear and unambiguous”.

While COVID-19 was unknown at the time the man activated the policy in July 2019, the evidence suggested the amended travel plans arose from the perceived threat of the infectious disease.

“This is outside the policy coverage,” AFCA says.

Prior to rearranging his journey home, the man contacted Zurich’s 24-hour assistance line and was advised he would not be covered under the policy for claims arising from an epidemic, pandemic or outbreak of a contagious disease, but he could submit a claim for consideration.

The policyholder pointed to other travel insurance companies honouring claims if policies were in place prior to dates that the virus was declared, but AFCA says the fact other policyholders were covered did not assist him, as each complaint is considered on its own merits.

“Given the scope of the exclusion, I do not consider it is conditional upon when the policy was activated,” the AFCA ombudsman said. “The exclusion applies to all cover under the policy regardless and unless stated otherwise.”

AFCA also said the timing of declarations made by public health authorities was “irrelevant” as it was “the threat of the virus which has given rise to the claim”.

Click here to read the full ruling.