Heading off on holiday in New Zealand is risky as there is a chance the Government will have to impose restrictions should another outbreak of Covid-19 happen.
If you’re planning a holiday within New Zealand, Consumer NZ is warning you should think carefully before taking out travel insurance.
Travel insurance has traditionally been the domain of overseas travel – where a medical emergency can quickly become a financial disaster.
But after international travel all but ended as a result of the Covid-19 pandemic, travel insurers like Southern Cross Travel Insurance began marketing travel insurance.
Like most airlines around the world, Air New Zealand has been crippled by Covid-19.
The watchdog organisation says domestic travel insurance could be poor value for money.
In a report, it said its review of six domestic travel insurance policies found travellers might not get much cover if their plans “go pear-shaped”.
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Consumer’s head of research, Jessica Wilson, said: “When there’s evidence for saying don’t buy it, for example, particular types of funeral insurance or credit card insurance, we say don’t buy it.”
But while domestic travel insurance fell short of that, Wilson said: “The value for money you get is pretty minimal, and we think there are other steps you can take to prevent losses.”
Those steps include only booking accommodation from providers with reasonable cancellation policies, and if charged an unreasonable cancellation fee, taking a complaint to the Commerce Commission, or the Disputes Tribunal.
Consumer NZ noted that none of the six domestic travel insurance policies it looked at provided any cover in the event of travel plans being disrupted as a result of another lockdown.
Wilson urged people considering domestic travel insurance to read policies before they bought, paying attention to “exclusions”, which were scenarios which policies did not cover.
For example, policyholders could not make claims for a cancelled trip, if the cancellation was the result of the Covid-19 pandemic, the travellers changing their minds about travelling, illness caused by a pre-existing condition, or because the traveller made a mistake with their booking, or needed to cancel because of surprise work commitments.
Consumer noted that people’s home contents insurance often covered belongings when away from home. This included specialist sporting gear like ski equipment.
Booking travel domestically can be risky at present. When Auckland went into alert level 3 in August, preventing people from leaving the city, some travellers found accommodation providers refusing to refund their money.
Wilson said Consumer NZ had been contacted by unhappy travellers stymied by the August restrictions, but said accommodation providers were obliged by law to have reasonable terms and conditions.
She advised people concerned an accommodation provider had broken the Fair Trading Act to contact the Commerce Commission.
Wilson also advised people to book using a credit or debit card, if they could, so they could seek a “charge back”, if an accommodation provider cancelled their registration, and didn’t provide a refund.