Covid-19 travel claims: An insurance lawyer’s guide

by Marcus Vella – Associate, Gilchrist Connell*

The world is opening up again.

After months of late nights working from home, dialling into court hearings at the breakfast table, and swearing affidavits over Zoom, perhaps, like me, you are now finally daring enough to swap your top-half-only suit and curated video-call background for a comfy pair of travel pants to jet off far and wide across Australia or further abroad.

Brimming with optimism, you pack your bags, brave apocalyptic airport queues, and reach your flight in time to gleefully heed the advice to put your phone on flight mode for everyone’s safety, and not to avoid the steadily expanding pile of work emails filling your inbox.

Just as you think you’ve made it, and the unpredictable trap of travelling during a pandemic appears to have been finally overcome, Covid-19 has other ideas.

That’s exactly what happened to me, a Sydney-based insurance lawyer, when my partner contracted Covid-19 on our trip to Queensland for a wedding. Unfortunately, with nearly 50,000 confirmed cases of Covid-19 across Australia each day and rising, odds are that something similar may happen to you.

But, as a cautious, forward-thinking intellectual, you have planned ahead and purchased travel insurance. Doing so might just save you in the event of a claim.  

What losses may be covered?

As with all insurance contracts, the specific terms of your travel policy are key.

Commonly, travel policies exclude cover for losses arising from Covid-19. However, many travel insurers now offer a limited optional cover when Covid-19 impacts on your travel plans. The nature and scope of cover can vary significantly between policies and insurers, and between domestic and international travel. It is important to closely review the full terms, conditions, limits and exclusions of the policy you intend to purchase.

Where Covid-19-related cover is available, it is often limited, triggering only if you or someone you are travelling with contracts Covid-19 within a certain period before or during your journey. Some policies may provide cover if you are a close contact and therefore unable to travel. In those circumstances, cover may not be available if the travel provider cancels their services for reasons incidental to Covid-19, such as changes in border restrictions or staff isolation requirements.

Even if you or your travel partner contract Covid-19 within the covered period, only certain losses may be the subject of the limited cover. Some Covid-19 policies only cover medical and repatriation costs, whereas others, usually for additional premium, will provide limited cover for consequential loss flowing from the illness, such as quarantine or isolation costs, and the costs of wasted tours at your intended destination.

Three key personal tips:

1. Closely read the definitions in your policy. In some policies, cover may be limited to either you or a spouse, de facto or dependantcontracting Covid-19. Such policies may not respond if you are travelling with friends and one of them contracts the virus.

• If your policy provides cover for cancellation of pre-booked flights, accommodation or tours due to Covid-19, it will often respond only if no refund or credit is available after you request that. Check with your travel providers, or your travel agent, on what refund and credit policies apply to you, so you don’t end up with six-month credits that may be of little practical use to you.
• Don’t wait until the last minute to buy insurance, because some insurers will only cover you if someone contracts Covid-19 and the policy was purchased more than 21 days before your scheduled departure date.

You catch Covid-19 while travelling, what now?

Under many policies, contracting Covid-19 is considered a medical emergency, so once you suspect you have Covid-19 or have tested positive, your first step should be to call your travel insurer’s medical emergency hotline. Most travel insurers have 24-hour hotlines to help you manage your claim and it will be the most useful source of information for meeting the requirements of your policy. Take the name of the person assisting you and keep a note of the time and date of the call and all steps your insurer requires of you.

Helpful questions to ask your insurer:

• What level of Covid-19 testing is required by the insurer?Some insurers will only cover you if you are ‘medically diagnosed’ with Covid-19. In practice, this may mean you must test positive on a polymerase chain reaction (PCR or RT-PCR) test, as opposed to a more widely available rapid antigen test (RAT). In reality, that can be logistically difficult if you are stranded in a foreign place with no car or nearby PCR testing site. If so, ask whether a positive RAT is sufficient in the circumstances or seek pre-approval from your insurer to cover your costs of getting to a PCR testing centre.
• How long do you have to submit the claim? Many travel policies have a time period within which you must submit your claim form to obtain cover. In some circumstances, you may be required to submit your form, plus all supporting documentation, within 28 days of testing positive. That can be a tall order if, for half those days, you feel tired, unwell and incapable of braving hours of airline on-hold music required to obtain your refund or credit, all while figuring out exactly how you will now get home to your own bed. Ask whether the time period starts from the day you arrive home or the date of your test and, if in doubt, submit the claim form within the earliest of the two times and tell the insurer your supporting documents are forthcoming. Many insurers allow more time to submit claims, if required in the circumstances.

Always keep all confirmation emails, tax invoices, and records of payment in a single place, ready to submit with your claim form. As tempting as it can be to leave your laptop at home while you travel, it’s best to have it with you to help you navigate the claim.

If your policy won’t respond

If you consider your claim has been incorrectly declined, your first avenue of recourse is to submit an internal complaint to your insurer, which must be handled in accordance with the insurer’s internal dispute resolution (IDR) processes. Ensure you are aware of your rights under your insurer’s IDR policy and, for signatory insurers, the Insurance Council of Australia’s General Insurance Code of Practice.

If you remain of the view that cover has been incorrectly declined after exhausting the IDR process, there are alternative avenues available to you.

• Lodge a complaint with the Australian Financial Complaints Authority (AFCA). All travel insurers operating in Australia are APRA regulated and all must engage properly with any external complaint lodged with AFCA. AFCA is a consumer-focused complaints handling ombudsman that has the power to compel your travel insurer to honour their obligations under your policy and the Insurance Contracts Act 1984.
• If your dispute is with an airline, lodge a complaint with the Airline Customer Advocate, which can step in when a dispute involves air travel services arranged through a participating airline (currently Jetstar, Qantas, Virgin Australia and Rex).
• If you believe other service providers are responsible for your loss, consider lodging a complaint with them directly. They may include tour operators, accommodation providers and travel agents. Each service provider may or may not have formal dispute resolution processes.
• Obtain legal advice.If you cannot resolve your complaint through informal or formal dispute resolution processes, or you simply want the benefit of legal advice and representation through those processes, you may wish to seek advice from a suitably qualified lawyer. They can advise you on your rights and obligations, and the appropriate method of resolving the dispute. It is important to note there may be time limits in which you can lodge complaints or bring legal actions, so seek advice as early as practicable. 

*The views expressed in this article are the author’s own, not those of the law firm Gilchrist Connell. Marcus Vella wrote the article on AILA’s behalf and it was first published in the South Australian Law Society’s Bulletin.