Travel Insurance Claim Denied in Australia: How to Fight Back

If your travel insurance claim is denied in Australia, you can dispute it by requesting the specific policy clause your insurer relied on, challenging their interpretation through Internal Dispute Resolution (IDR), and escalating to AFCA for free if they won't budge. Common denial reasons like pre-existing conditions, inadequate documentation, or 'reasonable care' exclusions are frequently overturned on appeal.

Key takeaways

• Common travel claim denial reasons include pre-existing conditions, lack of documentation, and 'reasonable care' exclusions.
• Request the specific policy clause your insurer relied on. Vague or generic denial reasons can be challenged.
• If a pre-existing condition is cited, check whether your policy uses a blanket exclusion or one limited to conditions you knew about.
• You can dispute through IDR and AFCA at no cost, even for overseas incidents.

You paid for travel insurance, something went wrong on your trip, and your insurer has refused to pay. Travel insurance disputes are one of the fastest-growing categories at AFCA, and for good reason. Travel policies are full of exclusions, conditions, and definitions that many consumers do not fully understand until they need to claim. But a denial does not mean the insurer is right.

Common reasons travel insurance claims get denied

Travel insurers deny claims for a wide range of reasons. The most frequent are pre-existing medical conditions not disclosed or excluded under the policy, the event falling under a general exclusion such as pandemic or government travel advisory, the insurer arguing you did not take reasonable care to protect your belongings, failing to notify the insurer within the required timeframe, and being unable to provide sufficient evidence of the loss.

Your denial letter should state the specific reason and the policy clause the insurer is relying on. If it does not, ask for clarification in writing before you do anything else.

The reasonable care exclusion

This is one of the most commonly disputed exclusions in travel insurance. Insurers frequently argue that you did not take reasonable precautions to prevent the loss. You left your bag unattended for two minutes at an airport. You did not lock your hotel room safe. You did not keep your phone in a zippered pocket.

The legal standard for reasonable care is not perfection. It is what a reasonable person would do in the same circumstances. AFCA has consistently held that insurers cannot expect travellers to maintain a level of vigilance that would make travel impractical. If you took the precautions that a normal person would take, the exclusion should not apply.

Pre-existing medical conditions

Travel insurance policies typically exclude claims related to pre-existing medical conditions unless you declared the condition and the insurer agreed to cover it, sometimes for an additional premium. The definition of pre-existing varies between policies. Some define it as any condition you have received treatment for in the past 12 months. Others use broader definitions that can capture conditions you did not even consider relevant.

Under the Insurance Contracts Act, Section 29 limits the insurer's ability to rely on non-disclosure. They can only refuse a claim for non-disclosure if you failed to answer a specific question honestly, and the non-disclosure was of a kind that would have changed the insurer's decision. If they asked a vague question and you gave a reasonable answer, you may have a strong case.

Pandemic, government advisories, and known event exclusions

Since 2020, many travel insurance claims have been denied under pandemic, government advisory, or known event exclusions. Insurers argue that if a travel advisory was in place when you purchased the policy, any related claim is excluded. This is often legitimate, but not always.

If the specific risk that affected your trip was not the one covered by the advisory, the exclusion may not apply. Read the exact wording of the exclusion in your PDS. Insurers sometimes apply these exclusions more broadly than the policy language justifies, and AFCA will look at the actual wording, not the insurer's interpretation of it.

How to dispute a travel insurance denial

Lodge an Internal Dispute Resolution complaint with your insurer in writing. Address their specific reason for denial and explain why you believe their decision is wrong. Include your denial letter, the relevant sections of your PDS, and all supporting evidence: receipts, photos, police reports, medical certificates, boarding passes, and hotel bookings.

Reference any relevant provisions of the Insurance Contracts Act. Section 54 is relevant if they are denying based on a procedural failure such as late notification. Section 13 applies if the insurer has not acted in good faith in their assessment.

The insurer has 30 days to respond to your internal dispute.

When to escalate to AFCA

If your insurer upholds their denial at IDR, or fails to respond within 30 days, lodge a complaint with AFCA. Travel insurance disputes are a significant part of AFCA's workload, and they have extensive experience with the common exclusions and arguments that insurers use.

AFCA is free for consumers. The insurer pays the costs regardless of the outcome. AFCA can consider general insurance disputes where the amount claimed does not exceed $1,263,000, though most travel claims are for smaller amounts. Be aware of time limits: you generally need to lodge within two years of receiving the insurer's final response.

Prevention is better than disputes

Before your next trip, read the PDS before you buy the policy, not after you need to claim. Declare all pre-existing medical conditions honestly. Keep receipts for high-value items you are travelling with. Take photos of your luggage contents before you leave. And check government travel advisories before booking, because your insurer certainly will.

If your travel insurance claim has been denied and you need help preparing a structured dispute, a document preparation service can help you put your case clearly and effectively without the cost of legal representation.