Case study COVID-19 – no refund for flight costs

What happened

Mr M was on a flight to the Philippines when his journey abruptly ended in Bangkok, because the city was ordered to remain in lockdown.

As a result, all flights to his holiday destination were cancelled. Mr M, who found himself stranded in Bangkok, organised a return trip to Switzerland earlier than planned.

He reported a claim for the forfeited airline tickets to his travel insurance. But the insurer said that no refund could be given as his policy excluded cover for loss caused by a pandemic or epidemic.

Outcome of Ombudsman investigation

We checked the terms and conditions of Mr M’s policy and noted that it contained a pandemic exclusion clause. However, epidemics was listed as an insured risk.

We contacted the insurer. We said that it had not been foreseeable for Mr M that the WHO would declare COVID-19 a pandemic on the day of his departure. The consequences of the pandemic were also not foreseeable.

In our intervention we referred to a written legal opinion, which was drawn up at our request due to the many cases relating to the COVID-19 pandemic the Insurance Ombudsman had to handle. According to the legal opinion a pandemic is a particular case of an epidemic. We, therefore, argued that the pandemic exclusion was not valid.

The insurer took up the position, that pandemics were a systemic risk that couldn’t be insured. As Mr M belonged to a risk group, the travel insurer agreed to pay for the return flight due to the specific circumstances of the case. It did so without recognition of a legal obligation.