Insurance Claim Rejected After Flight Crew Timing Violation

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

A traveler who faced a canceled flight due to the flight crew reaching their legal working hour limits will only receive partial reimbursement for his expenses.

This ruling came from an official complaints authority.

The frustrated passenger incurred additional costs when his flight from Palermo to London was unexpectedly stopped because the crew had worked the maximum hours allowed by law. He expected full coverage for these expenses under his travel insurance policy.

However, Lloyd’s Australia, the insurer, denied the claim, stating that the travel policy’s clause on additional expenses and disruption coverage only applies to events such as strikes, riots, hijacks, civil unrest, adverse weather conditions, or accidents involving the mode of transport.

The claimant argued otherwise, insisting that the crew reaching its working hours limit was akin to industrial action such as strikes, implying that the insurer had a too narrow interpretation of the policy's disruption cover. He stated that the restriction on working hours is a precaution to prevent accidents, which aligns with the "spirit of the policy".

Yet, The Australian Financial Complaints Authority (AFCA) did not accept this reasoning.

AFCA pointed out the scant information provided by the claimant which linked the flight cancellation directly to crew working hours being exceeded. They reinforced that this situation is distinct from a strike.

“A strike constitutes a deliberate refusal to work, whereas regulatory limits on work hours are a constraint and not a chosen action,” noted the AFCA's ombudsman. “Additionally, equating flight crew timing regulations with an accident scenario is not fitting, since the clause in question applies to actual incidents happening, not cancellations meant to forestall potential accidents.”

However, AFCA acknowledged a part of the travel policy which offers coverage for scenarios where a flight is delayed over six hours due to uncontrollable circumstances.

Under this provision, the insurer is required to compensate the complainant with the policy’s cap of $2000.

“Although the insurer claims that these circumstances are specifically excluded by the policy, they failed to indicate which exclusion they are relying on and provide justification for triggering it. Therefore, it is unconvincing that the insurer has adequately clarified its entitlement to decline or reduce the claim under this section,” AFCA concluded.

This case was originally reported by Insurance News Australia.

Published:Monday, 9th Sep 2024
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Insurance News

ACCC Halts IAG's Bid to Acquire RAC WA's Insurance Operations

05 May 2026: Paige Estritori

The Australian Competition and Consumer Commission (ACCC) has recently opposed the proposed acquisition of RAC WA's insurance division by Insurance Australia Group (IAG). This decision stems from concerns that the merger could significantly reduce competition within Western Australia's insurance sector, potentially leading to higher premiums for consumers. - read more

South-West Queensland Councils Explore Community Insurance Mutual to Combat Rising Premiums

05 May 2026: Paige Estritori

In response to escalating insurance premiums, with some residents experiencing increases of up to 500%, councils in South-West Queensland are exploring the establishment of a community insurance mutual. This initiative aims to provide more affordable and accessible insurance options for local communities, particularly those in flood-prone areas. - read more

IAG Highlights Climate Change as a Factor in Rising Home Insurance Premiums

05 May 2026: Paige Estritori

Insurance Australia Group (IAG) has recently highlighted the impact of climate change on rising home insurance premiums across Australia. The insurer reports that increasingly frequent and severe weather events are contributing to higher costs for homeowners seeking coverage. - read more