Cancel or Credit – Travel Insurance Woes

Stuff happens! Especially when it comes to expensive overseas travel arrangements. Some call it Murphy’s Law, the principle that if something can go wrong it will. On that basis, most people will purchase travel insurance to make sure they are covered. As our government says on its smart traveller website, if you cannot afford Travel Insurance, you cannot afford to travel. But what happens when something does go wrong, you have insurance, yet there are a number of options when it comes to changing or cancelling your travel? What do you choose?

Quick question, we are due to fly to Vietnam on Saturday but due to an illness we are now cancelling the whole trip. With the flights trying to do the right thing so we are covered 100% by insurance company QBE. Have required medical certificates etc

Do we cancel the flights and then claim all money back or should we put the flights into credit and then reuse at a later date (I know I can claim the rebooking fees via travel insurance). I prefer to just cancel and then claim money back but don’t know how the insurance company handle this.
Anyone have any experiences they can share?

The first obvious course of action is to ask your insurer what you should do. Often the fine print will detail what is covered and what is not in the products disclosure statement. If it’s not clear, then a phone call will be in order. Just don’t expect a clear answer from all companies.

On my most recent experience with a travel insurance claim (not with QBE), the advice was rather sparse and mainly directed me to submit a claim and see how it is assessed at that point.

If calling them does not provide a clear answer, then the situation needs to be looked at in the eyes of the insurer. What course of action will provide the best outcome for both parties? With this in mind there is an important principle to abide by.

You are, in theory, required to mitigate any losses as far as possible.  If the illness is something which you expect to pass, and to resume your journey in the near future, you could perhaps weigh up the cost of a credit + rebooking fee against any cancellations fees or complete loss of airfare (depending on the fare rules).

If the illness is something which means you are uncertain about future travel plans, or would not be able to comfortably commit to rebooking within the period of the credit voucher validity, then you can probably go ahead and cancel with confidence.
For example, if you were to cancel completely today and claim full reimbursement, and yet rebook the flight in two weeks time, the insurance company may question why they are paying out when there was a cheaper alternative.

For most trips, travel insurance provides piece of mind (our Gold members can get discounts as part of their membership benefits package). But if you have to make a claim, read the fine print carefully and talk to the company if things are not clear. Perhaps Murphy’s Law struck you, creating an insurance pickle? Why not share your experience HERE.


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