Travel insurance accounted for most complaints to New Zealand’s Financial Services Complaints Ltd (FSCL) in the year to June 30.

Of the 47 complaints against insurers, 30 related to travel cover, the FSCL’s annual report says.

Consumers found the amount and scope of cover was less than they expected, while common issues involved pre-existing medical conditions and baggage lost while unsupervised.

Despite a 400% increase in complaints, CEO Susan Taylor says consumer awareness of the service is low. She says many members do a good job resolving complaints, while others are reluctant to refer an unresolved matter.

The FSCL is one of three approved dispute resolution schemes – which include the Insurance and Savings Ombudsman. It covers financial service providers such as card issuers, lenders and stockbrokers.

It received 115 cases for investigation during the year and completed enquiries into 92.

Formal recommendations were made in eight cases, usually because the consumer did not accept a preliminary view that the complaint could not be upheld.

Ms Taylor says consumers rarely shop around for travel insurance and can avoid “nasty surprises” by enquiring about the scope of cover.

The FSCL says it expected more earthquake complaints about insurance advisers.

In one case, conciliation between a floor-covering business and its broker was resolved when the broker’s professional indemnity (PI) insurer offered a settlement of $NZ100,000 ($78,880).

The company’s business was cordoned off after the earthquake of February last year and it could not trade for a month. When it claimed for business interruption (BI) the insurer said there was no cover.

The company complained to the FSCL because during a comprehensive insurance review in 2008 the broker had given it a manual showing it had 100% earthquake cover for all risks.

It was found that a previous director had cancelled the BI cover in 2001 but the broker failed to advise the new directors at the 2008 review.

The matter was settled at conciliation between the two parties and the broker’s PI insurer.

The company initially claimed losses of $NZ160,000 ($126,200) but the broker’s loss adjuster estimated a figure of $NZ22,000 ($17,353).

The company argued for directors’ time in preparing the claim and said the loss adjuster had not factored in lost work installing floor coverings, as well as selling them. The company also lost sales from emergency repair work in Christchurch.