Insurance changes mean travellers could face big bills

11.30 am

New Zealand's three largest travel insurance companies say they will no longer cover travellers for costs resulting from the collapse of airlines, hotels, rental car companies and other travel service providers.

Mike Henry Insurance, QBE and Tower Insurance say uncertainty within the travel industry following last week's terror attacks on the United States and financial problems at airlines have left insurers exposed to the risk of large payouts.

A statement issued by New Zealand's largest travel insurer, Mike Henry Insurance, says policies issued after 5.30 pm yesterday "will no longer provide cover for financial collapse for airlines, transport providers, or suppliers of other services, eg, accommodation providers, tour operators, hire car companies or wholesalers".

QBE made a similar change to its policies at midnight Tuesday night, and Tower Insurance followed at midnight Wednesday night.

Rick Ballinger, manager of QBE's travel insurance division, said travellers should make their own judgment as to the reliability of travel service providers.

"It's a case of 'buyer beware' and the cheapest deal could mean a higher risk."

He said if an airline were to go bankrupt, a stranded traveller could have to pay for a new ticket. The collapse of a tour company could mean the loss of all money paid to it by the traveller.

In a message sent to agents yesterday, Mr Ballinger said the move followed "costs associated with the World Trade Center disaster and the collapse of Ansett Airlines".

This morning he said the change to QBE policies was not directly related to Air New Zealand's current financial difficulties, as other airlines were also in difficulty, particularly since the attacks in the United States.

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: 0168 1800 932 8555

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: 0168 1800 245 0999

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: 0800 872 111

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