AXA/Coverwise refusing to pay out for flight cancelled due to airline going bankrupt

TurboJim

Last summer my daughter made a trip from London to Orlando, but with a stop in Canada on the way. She booked a return flight London to Montreal with Air Canada, and then one way flights to and from Orlando. I made sure she bought a comprehensive travel insurance policy that covered North America - with Coverwise, underwritten by AXA.

The return flight Orlando - Montreal was with Canada Jetlines, and a few days before she was due to fly back they went bust. I told her to contact the travel insurance company, assuming they would make the arrangements to book her onto another flight, but she was unable to contact them by phone, and eventually was advised to book a new flight and claim back the cost.

I then paid for a replacement flight with Air Canada. She made it safely home, but had to cut her trip short by about 12 hours and had a lengthy layover at Montreal.

Once she arrived home we submitted a claim including all receipts, and they did nothing at all until January this year when they finally announced the claim was rejected as the policy "does not cover missed connections". We wrote back saying that the connection was not missed - we paid extra so that she didn't miss her flight, and that the airline going bust was out of our control.

They eventually responded in April suggesting that if we aren't happy we can complain to the Financial Ombudsman.

The only possible reason I can think of is that the journey wasn't booked as a through ticket to the UK, but given that the policy covers the USA and Canada, surely that wouldn't be relevant?

I'd appreciate any advice on how to proceed. Fortunately my credit card refunded the cost of the flight which was cancelled but I am still a few hundred pounds out of pocket.

Many thanks! 

Sam_666

She needs to make complaint to FO. But you probably wont get much as you already got flight cost recovered.

Voyager2002

Post an enquiry on the credit card section of this forum: one can argue that the legal liability of the airline, and hence of the credit card company, was to provide the flight rather than simply refund the price of the ticket.

Read the insurance policy VERY carefully... in my experience travel insurance only covers flights from or to the UK, not other journeys that are part of your holiday (which I think is what they mean when they talk about "connecting flights").

eskbanker

Unless you have something that says different, I don't believe this is an insured risk?

Do Coverwise offer a policy that provides cover if an airline unexpectedly goes into liquidation?

While our travel insurance policies do not cover Scheduled Airline Failure, we are happy to change travel dates to cover an alternative holiday on any of our single trip policies, providing there are no claims known or pending.

https://www.coverwise.co.uk/travel-insurance/faqs/frequentlyaskedquestions.aspx?Question=Do-Coverwise-offer-a-policy-that-provides-cover-if-an-airline-unexpectedly-goes-into-liquidation-

sheramber

I think she would have been covered if she had booked a through flight to Orlando with a stop in Montreal but as she booked an independent flight to and from  Orlando it would not be covered by her insurance.

bagand96

Booking self connections can be risky for a number of reasons.  How long was the original connection in Montreal?  What would they have done if Canada Jetlines had cancelled the flight on the day, or it was severely delayed?  Without robust Missed Connection cover they'd have been in the same situation.

I think @eskbanker has the answer, this would fall under Scheduled Airline Failure cover and it seems the policy doesn't have it.  @Voyager2002 makes an interesting point about Section 75 liability on the credit card company.  there certainly is an argument they are equally liable.  I think people may have successfully used this argument in the past when there's been big UK airline collapses

TurboJim

Thank you all for your advice. I think one of my main issues with cover wise is their absolute refusal to explain themselves in language that can be understood. It might well be that my particular circumstances aren't covered but they've literally just said "missed connections aren't covered" which doesn't make sense as nobody missed a connection. 

Useful advice re asking the credit card company for assistance - thank you 👍🏻 

eskbanker

TurboJim said:

Last summer my daughter made a trip from London to Orlando

[...]

Fortunately my credit card refunded the cost of the flight which was cancelled but I am still a few hundred pounds out of pocket.

On the subject of credit card assistance, the card company's liabilities under section 75 are contingent on an unbroken debtor-creditor-supplier chain, effectively meaning that a parent using their card to pay for a flight ticket in their daughter's name is unlikely to be covered by s75.

The fact that they've apparently already stumped up would therefore suggest that this would have been processed as a chargeback claim (which doesn't have the s75 D-C-S stipulation), but that process doesn't allow for anything beyond reimbursement of the purchase cost, i.e. it wouldn't be a viable route for trying to reclaim consequential costs....

jbryce

TurboJim said:

Last summer my daughter made a trip from London to Orlando, but with a stop in Canada on the way. She booked a return flight London to Montreal with Air Canada, and then one way flights to and from Orlando. I made sure she bought a comprehensive travel insurance policy that covered North America - with Coverwise, underwritten by AXA.

The return flight Orlando - Montreal was with Canada Jetlines, and a few days before she was due to fly back they went bust. I told her to contact the travel insurance company, assuming they would make the arrangements to book her onto another flight, but she was unable to contact them by phone, and eventually was advised to book a new flight and claim back the cost.

I then paid for a replacement flight with Air Canada. She made it safely home, but had to cut her trip short by about 12 hours and had a lengthy layover at Montreal.

Once she arrived home we submitted a claim including all receipts, and they did nothing at all until January this year when they finally announced the claim was rejected as the policy "does not cover missed connections". We wrote back saying that the connection was not missed - we paid extra so that she didn't miss her flight, and that the airline going bust was out of our control.

They eventually responded in April suggesting that if we aren't happy we can complain to the Financial Ombudsman.

The only possible reason I can think of is that the journey wasn't booked as a through ticket to the UK, but given that the policy covers the USA and Canada, surely that wouldn't be relevant?

I'd appreciate any advice on how to proceed. Fortunately my credit card refunded the cost of the flight which was cancelled but I am still a few hundred pounds out of pocket.

Many thanks! 

Does your policy include Scheduled Airline Failure? Most insurers don't cover it, and where they do, it is an optional extra.

TurboJim

jbryce said:

Does your policy include Scheduled Airline Failure? Most insurers don't cover it, and where they do, it is an optional extra.

I've read through the terms & conditions about 5 times now and can find no reference to Scheduled Airline Failure, therefore my assumption would have been that if it's not specifically excluded, then it must be included. The reason that the claim has been rejected was given as "missed connections are not covered," however the wording of that is very vague, and I would read that as meaning turning up late for your flight and missing it.
The whole reason I made sure she had travel insurance was for exactly this kind of unexpected problem, so it's very disappointing to find that it's not covered, but also that Coverwise are unable to explain exactly what the reason is in easy to understand language.
Lesson learnt for next time I suppose.

eskbanker

TurboJim said:

jbryce said:

Does your policy include Scheduled Airline Failure? Most insurers don't cover it, and where they do, it is an optional extra.

I've read through the terms & conditions about 5 times now and can find no reference to Scheduled Airline Failure, therefore my assumption would have been that if it's not specifically excluded, then it must be included.

That's the exact opposite of the logic that should be used when ascertaining the scope of an insurance policy - they're set up to cover you for specific identified risks, so if there's no reference to something then you're not covered.

Having said that, I agree that their reference to missing connections doesn't seem appropriate if the real reason is that the policy didn't cover the actual scenario of airline failure....