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Planning A Winter Escape? Travel Insurance Tips For Holidaymakers

It’s that time of the year when many Kiwis are heading overseas for adventures in warmer climes, however, Financial Ombudsman Susan Taylor is advising travellers to review their travel insurance policies before departure and safeguard their travel cards and valuables.

This comes on the back of a spate of recent complaints to free ombudsman and dispute resolution service, Financial Services Complaints Ltd (FSCL), involving travel card fraud and declined travel insurance claims.

Protect your travel card

Travel cards are a convenient way to take money overseas, however Financial Ombudsman, Susan Taylor, says it's essential to keep them secure at all times and to be vigilant when using them.

“Always keep your travel card in your possession and be cautious of 'shoulder surfers' when entering your PIN at ATMs or payment machines," explains Ms. Taylor. “If your card or PIN is compromised, the card issuer is not obliged to refund fraudulent transactions, leaving you responsible for the loss.” This was illustrated in two recent cases involving scammers and where the traveller allowed someone else to take possession of their card for a short time.

Another type of complaint FSCL are seeing is when people discover fraudulent activity on their travel cards months after using it.

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In one such case, a traveller’s claim was initially declined because they reported the unauthorised transactions months after the 30-day notification period stipulated in their card's terms and conditions. However, upon review, FSCL found that the 30 days referred to the period after becoming aware of the transactions, leading the travel card provider to reimburse the consumer for the loss.

“If you’ve used a travel card in the past and plan to use it again, we encourage you to check all account balances for any unauthorised transactions and tell your travel card provider immediately so that you are not caught short at the beginning of a new trip,” says Ms Taylor.

Secure your valuables

FSCL has also recently received a travel insurance case where a traveller had their valuables stolen after befriending some people and inviting them back to their hotel room.

The traveller met a few people at a local bar while in the UK and invited them back to his hotel room for another drink. After falling asleep due to a combination of jetlag and alcohol before the guests had left, he woke up the next morning, to find his valuables, including some gold jewellery and a mobile phone, missing from his bedside table.

“He was disappointed to find his travel insurance did not cover the loss because he had not taken reasonable precautions to protect his property from theft, a finding FSCL agreed with,” says Ms Taylor.

"Travel insurance policies typically exclude losses caused by someone invited into the insured’s accommodation, therefore, it's crucial to lock valuables in a safe place when traveling.”

Be aware of war and terrorism exclusions

With the recent outbreak of hostilities around the world, many travellers may be unaware that most travel insurance policies exclude coverage for losses due to war or terrorism.

In one such case, a traveller’s claim was denied when conflict disrupted her upcoming trip to Israel and her tour was cancelled. Despite having booked her flights and tour using a credit card with complimentary travel insurance, her insurer refused to reimburse her for the trip costs because the losses were due to war, which was explicitly excluded under her policy.

"Travel insurance policies commonly have exclusions for terrorism or acts of war," explains Ms Taylor. "This means that if you have to cancel, interrupt, or delay your trip due to such events, it will not be covered unless your policy specifically states otherwise. To avoid unpleasant surprises, it's vital to thoroughly review your policy's terms and conditions before traveling.” You can read the full case note here.

“Enjoy your holiday but do your research and stay vigilant. Some things are unavoidable, but by taking these precautions, travellers can help ensure their trips are as smooth and enjoyable as possible.”

If something has gone wrong with a financial service provider, people can make a complaint to FSCL at www.fscl.org.nz, by calling 0800 347 257, or by emailing complaints@fscl.org.nz.

*Our case notes are anonymised. We have changed names and other identifying information to prevent consumers and financial service providers from being identified.

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