Baggage late? Snowed in? Travel insurance may still deny claims, watchdog warns

The Consumer Council has called on the insurance industry to enhance transparency in policy terms after receiving 221 complaints related to travel insurance since 2022, including 55 cases in the first 10 months of this year.

Many involved disputes over claims, with consumers finding that incidents they assumed were covered were later deemed outside the policy scope.

In one case, a traveler returning from Vancouver to Hong Kong found that his checked baggage arrived 31 hours late. His policy stated a maximum of HK$300 compensation for every six hours of baggage delay, prompting him to file a claim.

The insurer, however, rejected the request on the grounds that baggage delay coverage applied only to delays at the destination during the trip — not upon returning to Hong Kong.

The insurer told the Council that compensation under “baggage delay” is intended for necessary purchases such as clothing and toiletries when luggage fails to arrive at an overseas destination. The exclusion section, it noted, clearly states that any loss incurred after the insured person’s return to Hong Kong is not covered. The dispute was not resolved.

Another complaint involved a traveler on a seven-day self-driving trip in Japan. While driving to a mountain hotel, he was caught in a severe snowstorm and stranded on a mountain road for more than eight hours, arriving at the hotel only the next morning.

He sought compensation of around ¥100,000 for emergency roadside assistance and one night of missed hotel use, arguing that the incident fell under “trip curtailment” and “travel delay.”

The insurer disagreed, stating that “trip curtailment” refers to losses arising from shortening or changing the itinerary, which did not apply in this case. It added that “travel delay” only covers delays involving public transportation affected by uncontrollable events — not rented vehicles used in self-driving tours. The complainant’s request for a review and detailed explanation went unanswered.

The Council said the cases reflect a wider problem: consumers often do not fully understand the differences in coverage among various travel insurance products, and discrepancies frequently arise between consumer expectations and insurers’ interpretations.

It urged insurers to highlight key terms and exclusions more clearly, while advising travelers to compare plans carefully and read definitions closely.

For unresolved disputes, the Council reminded consumers that they may seek assistance from the Insurance Complaints Bureau.