Question #7

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Our organization had booked flights and hotels to attend events, which have now been cancelled as a result of Covid-19.  If we are not able to get refunds from the airlines and the hotels, are we able to claim the cost from travel insurance?

If losses cannot be recovered from the airlines and the hotels, the organization may be able to claim the cost from travel insurance. Your ability to recover a cancellation cost from a travel insurance policy will depend on the precise terms of the policy which you have obtained. However, please refer to the below points for some general guidance: 

  • Make sure you have the complete copy of your insurance policy. Insurers often focus on policy “summary” or “schedule” document when you receive your insurance documentation. However, the policy summary will not include all the information that you need. The full policy, with all the terms and conditions, should have been included in the documents you were given, otherwise contact your insurer to request the full policy. 
  • Before making an insurance claim, you must first limit your losses by trying to seek a refund from the relevant airlines and hotels. 
  • You should save copies of all receipts and communications with airlines/hotels, as most insurers will require evidence that a refund could not be obtained.
  • You should check the specific terms of the “Exclusions” section of your policy. Even if you obtained the insurance policy before the start of the Covid-19 pandemic, your policy may not cover:
    • a cancellation caused by a pandemic/epidemic/government travel bans, regardless of when the flight/airline booking was made; or 
    • bookings which you made after the Covid-19 pandemic was a “known event” and/or after countries implemented travel restrictions. Your insurer may have published information (e.g. on its website) explaining certain “cut-off” dates after which no cover is available for certain bookings (e.g. bookings for travel to China may not have been covered since January 2020). 
  • Even if you are able to make an insurance claim, you should check your policy to see if it refers to: 
    • a “deductible” or “excess” for claims. This is an amount which you, as the policy holder, will be required to pay before the insurer will make any payment. For example, in the case of car insurance, if there is damage of HKD 10,000 but the insurance policy has an excess of HKD 1,000, then the insurers will only pay out HKD 9,000.
    • the maximum amount that the insurer will pay for (a) an individual loss (e.g. a single flight or hotel booking), and (b) total (or “aggregate”) losses (e.g. multiple cancellations). If you have cancelled a single flight and hotel, then you are unlikely to exceed the maximum amount under your policy. However, if you are trying to claim for the cancellation of multiple bookings, the payment by the insurance company may be capped at this maximum amount. 
  • If it is not possible to make a claim under the insurance, but you have paid for the service on a credit card, you should contact your credit card provider to request a “credit card chargeback” on the ground that the service has not been provided. This means the credit card provider will reverse the disputed transaction. There are time limits for making this type of request, so you should contact your credit card provider shortly after failing to get a refund from the airline or hotel.  
  • Check if there are any timing requirements for when you must make a claim. For example, does the claim require “immediate notification”?
  • Check if there are any other specific procedural steps which must be taken when making a claim (for example, it may be necessary to supply certain information and documents). If you do not follow the right procedure, this may give an insurer a valid reason to reject the claim.