Consumer Watch: Travel insurers refusing to entertain claims if customers offered alternatives
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Cape Town - With most domestic flights only allowed to commence at level 2 of lockdown and international travel only at level 1, travel is likely to be a long way off. The situation is grave for the sector the world over, with prohibitions sinking airlines, costing jobs in associated sectors, and customers left carrying the proverbial baby.
Frustration is mounting as travellers are forced to accept vouchers, which is not in line with the Consumer Protection Act: Consumer Goods and Services Ombudsman Magauta Mphahlele has previously said consumers have a right to a full refund when they cancel due to the travel bans and restrictions on gatherings.
But consumers are now told their only recourse is through charge backs via their banks or submitting claims through their travel insurers. Those charge backs are only allowed under special circumstances - they must be submitted within 120 days, and can only be done if payment was made via direct debit from a credit card (not EFT).
And some travel insurers are refusing to entertain claims where customers have been offered alternatives.
Yet such “alternatives” are tantamount to the government telling smokers on Monday they can buy cigarettes that coming Friday, but when Thursday comes, it shifts the goal posts and says you can exercise from 6am to 9am.
Either way, you’re up the creek. And goodwill flies out the door.
Bryte Insurance has been singled out for telling customers that airlines and accommodation providers were giving them options so refunds would not be processed. This, despite the fact some of these airlines are bankrupt so vouchers are effectively worthless.
Teresa Gunning wrote to complain about Bryte after their trip had been cancelled.
“We booked a trip to Mauritius for 10 days in January 2020, for travel in April 2020. This was for myself, my son, daughter-in-law and two grandchildren. We paid for the entire trip in full to World Leisure Holidays.
“Bryte and World Leisure Travel are now refusing to refund us what we paid on grounds that we can postpone to a future date. There are extra charges going to be levied if we do postpone.”
Gunning says their circumstances have changed due to the pandemic so future travel is off the cards.
“We have requested a full refund from them, but are not getting any satisfactory answer - just being told what they don’t cover and there is a 100% cancellation penalty.”
Air Mauritius though, which had offered more flexible booking options as recently as March, was placed under voluntary administration on April 22. In a statement, the company said “travel restrictions, closure of borders and the cessation of flights” had led to “a complete erosion of the company’s revenue base”.
Travel agencies have borne the brunt of customer anger, but in most cases their hands are tied in terms of securing refunds as they pay the suppliers.
I asked Bryte about this case but was told vouchers, credits or postponements are compensation.
Anrieth Symon, head of travel says: “Bryte Insurance has no influence over the compensation offered to customers by travel providers (airlines, accommodation, etc), nor does it award these on behalf of the provider. Therefore, it is not our remit to recommend/insist what type of compensation the customer accepts from a travel provider.”
Symon said in a lengthy response that compensation options for cancellations or deferments were defined by the specific terms and conditions of the agreement the customer made with that service provider. And if the customer was unhappy with the compensation, they must engage the service provider directly on the matter.
“We have paid more than R7.4million in cancellation claims relating to Covid-19 and we will continue to pay all our valid customer claims for losses suffered - aligned to their specific policy terms, conditions and limits. Beyond this, we have extended a range of relief initiatives for customers across our business, to support them during these especially challenging and uncertain times.”
Asked about Air Mauritius’ troubles, Symon said the company were aware of them but had not yet been notified that airline was not offering compensation for losses.
“Until there is official notification of a change to their compensation policy, we must operate in good faith and within the parameters of our understanding of Air Mauritius’ current business mandate. Should Air Mauritius notify us and their customers that they will not be offering compensation, we will, of course, reassess the situation and take further action.
“Please note that where an airline is not in a position to compensate a policyholder for losses due to it being placed under voluntary administration, policyholders are able to submit insurance claims.”
The Gunning issue is not isolated: On Hello Peter, there are numerous complaints.
Navin H wrote on April 20: “We had booked our cruise in September 2019 and paid for our Bryte Travel insurance at the same time...
“This trip cost us a total of R94615 which is an absolute fortune for us and now when we try to claim due to the trip being cancelled Bryte Insurance is only prepared to pay us R2735
“No refund is being offered, they are only offering future cruise credits which is not what we want as it will be years before the cruise industry is on its feet again and that’s if they survive this We had taken out travel insurance to cover ourselves from exactly this and I am disappointed by the fact that Bryte is now trying to backtrack and get out of paying us.”
And Ilse says: “We took travel insurance with Bryte for our family of four’s holiday in March 2020. Due to Covid 19 we had to cut our holiday short and return to SA. We could not fly to France and visit Disneyland as planned and paid in full upfront
“The consultant notified me that they are not paying for our Disneyland tickets that we also had to cancel.”
According to the consultant, Ilse says, “the Disneyland tickets do not form part of the travel costs (as they) are fun activities”.
Air Mauritius could not be reached for comment last week.