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.

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

Clear

Surging Insurance Costs Pose Challenges for Australian Retirees

08 Apr 2026: Paige Estritori

Recent reports indicate a significant increase in insurance premiums across Australia, with some policies experiencing hikes of up to 18%. This surge is placing considerable financial pressure on retirees, many of whom are on fixed incomes and find it challenging to accommodate these rising costs. - read more

AMA Calls for Urgent Reforms in Private Health Insurance Sector

08 Apr 2026: Paige Estritori

The Australian Medical Association (AMA) has released a report indicating that private health insurance is increasingly failing to deliver value for money. The report highlights that premiums have risen sharply, outpacing inflation and wage growth, while nearly 70% of policies now contain exclusions for specific treatments or conditions. - read more

APRA Freezes Unjustified Premium Hikes in Commercial Auto Insurance

07 Apr 2026: Paige Estritori

The Australian Prudential Regulation Authority (APRA) has recently implemented emergency measures to address significant premium increases in the commercial auto insurance sector. This intervention comes in response to widespread industry concerns over substantial rate hikes that threaten the financial stability of transport operators across the nation. - read more

Federal Court Upholds Denial of Truck Driver's Insurance Claim

07 Apr 2026: Paige Estritori

In a recent legal development, the Federal Court of Australia dismissed an appeal by a logging truck driver, Mr. Bradley Henschke, concerning his insurance claim through the Australian Retirement Trust. The case, Henschke v Australian Retirement Trust [2026] FCA 80, highlights the critical importance of understanding the specifics of insurance coverage within superannuation accounts. - read more

Escalating Fuel Prices Pose Existential Threat to Australian Trucking Industry

07 Apr 2026: Paige Estritori

The Australian trucking industry is facing unprecedented challenges as soaring fuel prices threaten the viability of many operators. Industry leaders are urgently calling for government intervention to prevent potential supply chain disruptions that could affect the entire nation. - read more

Click for more Insurance News