Lost luggage, flight cancellation claims surge

Allianz Partners is highlighting the importance of travel insurance ahead of the September school holidays after a surge in claims due to flight cancellations and lost or delayed baggage, especially for domestic travel.

Airport chaos saw claims relating to domestic cancellations jump 279% between April and June compared to the same period in 2019, the specialty niche insurance and assistance business says.

Domestic lost luggage claims also grew steadily this year, peaking in April and May around the Easter family holiday period.

Executive Head of Travel Damien Arthur says travellers are more aware of the importance of insurance as a “new travel landscape” makes it a must have, even for a domestic trip.

“They take more time to understand their policies ahead of their holiday,” Mr Arthur said. “Covid and its impact on travel has given Australian travellers a sharper awareness for what can go wrong on their holiday and an increased appetite to understand the minute detail of their insurance policy.”

Allianz Partners last year launched a new product which covers travellers, under selected benefits, should they contract covid while travelling, provided they have heeded government advice and taken appropriate action to avoid contracting the coronavirus.

Eligible customers may be entitled to a partial or full premium refund should covid border closures or mandatory quarantine shorten or cause a cancellation of travel plans.

Contact centre data shows a lot of ‘What if’ questions from travellers – What if I get covid? What if my flight is cancelled and I need extra accommodation? What if my bags are lost? – and Allianz has detailed answers on its website.

Last month, Allianz Partners said travel insurance policy purchases had almost doubled each month since January, rebounding as covid-related restrictions gave way to a 34% spike in international departures in June as Australians headed to Europe for the first time in two years.

It said 40 countries now require travellers to purchase covid cover, increasing engagement in the purchase of travel insurance and seeing it evolve “from a grudge purchase to the new must-have travel companion”.

In July, domestic travel sales were up 156% from 2019 levels, while international travel sales were up 45%.