Read the fine print: Winnipeg couple’s travel insurance claims ‘not covered,’ insurer says

A Winnipeg senior is questioning the value of buying flight cancellation insurance after his claim was denied.

James Parker, 78, and his wife, Rena, bought two tickets on WestJet flights to Calgary last December to visit relatives in January. They purchased the cheapest ticket option knowing they wouldn’t get a refund or credit should they need to cancel, so they decided to get cancellation insurance just in case.

The insurance was a cheaper option than the more expensive tickets.

“Pre-COVID, we didn’t really buy cancellation insurance,” James Parker said.

Because there have been so many delays with airlines since the pandemic, Parker said he thought he would get insurance for peace of mind. After he selected his tickets and seats, he clicked on the box for cancellation insurance.

“It was $117, I think, something like that,” he recalled. “It gives me a little bit of peace of mind, you know, so that’s what I did.”

A few weeks later, he says, they got a call that their accommodations would no longer be available because their relative’s condo had been flooded and she was forced to move out for six weeks. The Parkers had rented a condo in the building, but were told they would no longer be able to stay there.

WestJet refunded Parker’s seat selection, but he was still out $623.72 on the cost of the flight. He filed a claim with Allianz Global Assistance Canada, thinking he would be covered. He wasn’t.

The photo shows an expense claim was denied because the reason was not listed as a covered reason in the policy.
Allianz Global Assistance rejected Parker’s claim because the flood that made his accommodation unavailable was not a ‘covered reason’ under his cancellation policy plan. He initially submitted the claim for $823.72 but later phoned to let Allianz know he received $200 from WestJet for seat selection and was only claiming $623.72 from the insurer. (Submitted by James Parker)

“I mean, it said cancellation insurance. Quite honestly, I didn’t read the fine print,” Parker said.

“You would think there would be some leeway … it was impossible for us at the time to make other arrangements.”

A spokesperson for Allianz Global Assistance said the trip cancellation and interruption plan offered through WestJet does not cover disasters that affect prepaid accommodations at the insured’s destination.

“In general, for prepaid travel expenses to be eligible for reimbursement under trip cancellation benefits, the reason for cancellation must be listed as a ‘covered reason’ within the customer’s policy of insurance,” wrote Tayjua Squire, manager of corporate communications for Allianz Global .

She said a copy of the policy would have been provided to the customer at time of purchase.

Squire said all travelers should review their policy to understand the scenarios that are covered, and those that are not.

He believed his claim was reasonable and would therefore be refunded for the canceled flight, but later learned if it’s not listed as a covered reason no refund is provided.

“I thought it was unfair, and I questioned my idea about what insurance is for,” he said.

94% of claims are paid: insurance association

The Travel Health Insurance Association of Canada says a recent survey showed 94 per cent of travel insurance claims were paid.

“The benefits are there for many Canadians when they’re purchasing it. It’s the unfortunate times when the coverage expectations don’t line up with the actual wording of the policy,” said the association’s executive director, Will McAleer.

He says policies vary and advises purchasers to become familiar with what’s covered before boarding the flight.

Will McAleer is wearing a light blue pinstriped collared shirt.  He's sitting in front of a picture of a dock floating in a body of water.
Will McAleer, executive director of the Travel Health Insurance Association of Canada, says people should familiarize themselves with their cancellation policy before they travel. (Zoom)

“They put policies in and they price them according to the wording that they’ve got, so it’ll cover certain things in one policy, but maybe not another,” McAleer said.

For example, one of the “covered reasons” listed on Allianz Global’s website includes a disaster “that renders your pre-booked destination accommodation uninhabitable after you book your trip.” In that case, the Parkers would have been covered, but that option was not included in the WestJet policy he purchased.

“It’s not unusual for insurers in the Canadian market to have many different policy wordings depending on the partner or partnership that they’re working on. And those can differ in terms of coverages and provisions,” McAleer said.

Parker feels he had a valid reason to cancel his trip and should have it covered.

“It’s the principle more than the money that is bothering me at the moment,” he said, adding travel insurance policies need to be more nuanced.

“I understand it’s a business to make money, but I think there should be a way to deal with changes or modifications that arise, because not everything can be written down, you know? I mean, it’s life,” Parker said.

He said in the future he would rather buy travel insurance from a local company, and not just tick off a box and hope he will be covered if anything happens.

Winnipegger denied flight refund even though he bought cancellation insurance

Allianz Global Assistance says disaster at a pre-booked accommodation is not a covered reason under the policy.