Compare Life Insurance :: News
SHARE

Share this news item!

Red Sea Unrest: Insurer Denies Cruise Cancellation Claim

Red Sea Unrest: Insurer Denies Cruise Cancellation Claim

An Australian travel policyholder has been denied a claim payout after his planned cruise in the Red Sea was cancelled due to conflict.
The insurer, Southern Cross, invoked its policy's war and violence exclusion clause, as disturbances in the region were linked to military activities, rendering the claim invalid.

The cruise, initially booked for the previous October, was cancelled due to "ongoing unrest." While the holidaymaker received a credit voucher for the cruise, he had already altered his plans and incurred extra expenses. Southern Cross outlined that their policy excludes coverage for disruptions caused by conflicts, such as "acts of foreseeable violence" and "military operations."

The insurer elaborated that the cruise company's reference to regional unrest was tied to Middle Eastern hostilities, namely Israeli military actions in Gaza and Houthi movements targeting ships. The policyholder was forewarned of the non-coverage should regional hostilities impact the cruise itinerary.

Challenging the insurer's position, the claimant approached the Australian Financial Complaints Authority (AFCA), arguing that the term "unrest" should not fit the war and violence exclusion, stating that cruise vessels were not explicitly targeted. He noted that any violent incidents were mainly concerning cargo ships, suggesting no direct threat to passenger cruises.

AFCA's investigation clarified the circumstances, highlighting that, at the time of cancellation, American naval forces were actively escorting commercial ships in the area, engaging in combat with Houthi forces on occasion. The authority remarked that numerous shipping operators were side-stepping the region due to these threats, which are linked to hostilities involving the Houthis and Israel's warfare in Gaza.

An AFCA ombudsman aligned with the insurer's stance concluded that the regional situation exceeded mere unrest. The presence of US Navy activities was deemed indicative of military operations or foreseeable violence. Continuous Houthi aggressions were classified under foreseeable violence, justifying the insurer's denial of the claim.

Published:Friday, 20th Jun 2025
Source: Paige Estritori

Share this news item:

Insurance News

Impact of Trump Tariffs on Global Insurance Industry Impact of Trump Tariffs on Global Insurance Industry
11 Jul 2025: Paige Estritori

According to Swiss Re’s latest Sigma report, the growth of property and casualty premiums is moderating in both Australia and globally. This moderation is primarily driven by a slowdown in rate hikes. Additionally, the Trump administration's America First trade policy is putting further pressure on the insurance sector. - read more
Navigating Changes in Australia's Life Insurance Advice Landscape Navigating Changes in Australia's Life Insurance Advice Landscape
10 Jul 2025: Paige Estritori

The conversation on the shifting dynamics in Australia's life insurance advice sector featured Zurich Australia's head of adviser channel, Kieran Forde, and Hayes & Co director, Katherine Hayes. They engaged with editor Chris Dastoor to spotlight the current market conditions and future prospects for financial advisers in this domain. - read more
ASIC Challenges Federal Court's 'Fair Term' Ruling ASIC Challenges Federal Court's 'Fair Term' Ruling
09 Jul 2025: Paige Estritori

The Australian Securities and Investments Commission (ASIC) is appealing a Federal Court decision regarding the wording of a 'pre-existing condition' clause in certain HCF Life insurance products. The court previously determined that while the wording had the potential to mislead consumers, it did not constitute an unfair contract term under the current laws set out in the ASIC Act 2001. - read more
ICA Advocates for Strata Law Reform in the ACT to Enhance Building Management ICA Advocates for Strata Law Reform in the ACT to Enhance Building Management
08 Jul 2025: Paige Estritori

The Insurance Council of Australia (ICA) is urging the Australian Capital Territory (ACT) to adopt strata transparency regulations, aiming to enhance oversight of building repairs and maintenance by owners’ committees. This call was made during a parliamentary inquiry, where the ICA pushed for measures akin to recent legislative changes in New South Wales. - read more


Life Insurance Articles

Income protection insurance Income protection insurance
It's trite but true to say that, for most people, their most valuable asset is their ability to earn an income. But how relevant is income insurance to most Australians? - read more
Life Insurance and Estate Planning: What You Need to Know Life Insurance and Estate Planning: What You Need to Know
Life insurance and estate planning are critical components of financial security. They ensure that your loved ones are protected financially when you are no longer around. By understanding these tools, you can take significant steps to secure your family's future. - read more
Understanding the Role of Life Insurance in Your Estate Plan Understanding the Role of Life Insurance in Your Estate Plan
Estate planning is a critical process that often goes overlooked, but it's essential for securing the financial future of your loved ones and ensuring your assets are distributed according to your wishes. It involves the careful organization and protection of an individual’s estate to minimize uncertainties and facilitate the smooth transfer of assets after their passing. While it may seem complex, understanding the basics of estate planning is necessary for every Australian adult, regardless of wealth. - read more
Understanding Income Replacement Benefits: A Complete Guide for Australians Understanding Income Replacement Benefits: A Complete Guide for Australians
Income replacement benefits are designed to provide financial support when you're unable to earn a salary due to illness or injury. They act as a safety net, ensuring you can maintain your lifestyle and meet ongoing expenses during unexpected interruptions. - read more


Start Here !
life insurance
Apply now for your free Insurance assessment and price comparisons!

Start Here

Life Cover Amount:
Postcode:


All quotes are provided free and without obligation. We respect your privacy.
Knowledgebase
Incontestability Clause:
A provision in a life insurance policy that prevents the insurer from voiding coverage due to a misstatement by the insured after a certain period.