In its annual report, the Committee said that travel claims received by Code subscribers were down by six per cent last year from the previous 12 months, totalling 294,218. However, the number of travel claims denied rose by 20 per cent to 34,657. 

“The data on travel insurance in recent years, in particular the rising number of declined claims, has revealed this to be an area of concern,” the report states.

The most common reason cited for declining a travel claim is ‘no cover’, which the Committee says is ‘ambiguous’, according to a report by Insurance News in Australia. Other common reasons for denied claims include policy excess, pre-existing medical conditions or items left unattended.

Consumers and small businesses reportedly escalated 3,450 travel complaints to stage two of internal processes last year, an increase of five per cent.

The Committee, however, is querying whether enough is being done to ensure consumers know that claim disputes can be escalated to the Australian Financial Complaints Authority (AFCA) if an insurer upholds a claim denial after internal reviews.

Last financial year, only around a half of complaints with unfavourable outcomes after stage two of internal complaints processes were taken to the AFCA.

“A critical element of this is using the outcomes of complaints from the AFCA to improve these employees’ (those responsible for complaint reviews) knowledge and understanding of products, claims processes, general insurance law and principles and applicable consumer protection laws,” said the Committee.