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Which PDS applies to my travel insurance policy?

I am wondering if someone can please advise whether the PDS we were given when we paid the deposit for our overseas trip applies to our travel insurance policy or, whether the updated one we were not given when we finalised payment applies to our travel insurance? Our deposit was paid in May 2019 and we finalised payment in November 2019 for a trip commencing in May 2020. The PDS we were given in May was effective from November 2017 whereas there is a PDS I have noticed now on Flight Centre’s website effective from June 2019. I assume the new one replaces ours? but our agent has not advised us of the update. Further to this I believe we should be told what has changed in the PDS so we don’t have to re-read the whole thing! Any advice is most appreciated - thankyou.

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The authoritative answer, which should be in writing (eg a confirmation by email), would be obtained from the travel insurance company. As an interesting question that could apply to many of us, please post the answer here, as well as the company it applies to - they could vary company by company!

This all too common, and not just from insurances. Far too few provide a synopsis of what changes, a tactic I suspect is intended to obfuscate what they change for their own benefit by making it ever more difficult to ferret out.

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As you have seen the new PDS yourself, they may consider if a problem arise that you knew or should have known of the changes and are therefore subject to the new conditions. If you are concerned by the lack of advice I suggest you lodge a complaint with your travel agent (in writing) and advise you want the issue remedied. The remedy could be that they supply you with the new PDS and explain the differences to you. If the changes are significant and you wouldn’t have accepted the travel arrangements if you had known you could seek to withdraw from the contract, but you would need to obtain legal advice in this regard. I am not a lawyer but a contract change that offers less protection for you may be considered unfair terms and these are covered by Law to protect you. They should give you an option to withdraw if the terms have changed. The need to read the new PDS still remains your responsibility, if needed you should get a legal expert’s opinion of any changes that may affect you. You should also not rely on the Agent to give you a complete review of changes.

The ACCC has a dim view of unfair terms in contracts so a complaint to them may be very worthwhile.

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Also check the T&Cs of the PDS at the time of taking out the policy.

The T&Cs could state that the relevant conditions are that at the time the cover was taken (meaning an older PDS applies) or allows the insurer/underwriter to change T&Cs from time to time meaning the newer PDS may apply.

The later may be able to be challenged as one may not have taken out the cover at the time if the changed conditions materially impacted on the cover originally taken. Such could be seen as an unfair or unreasonable condition. It would be interesting to know what the changes to the PDS were and if they materially impact on the cover provided.

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Thankyou all three very much for your insight and advice. I have not been able to locate T&Cs (they’re not in the PDS and I can’t see them on the website) although there is reference to them in the middle of the PDS stating Cover-More may change parts of the FSG/PDS and that “any updates which are not materially adverse to You from the view of a reasonable person…may be found on www.covermore.com.au” but I have been unable to locate any such thing about changes. (What about updates which are adverse? where are they I wondered?). I did send an e-mail to Cover-More seeking clarification.They replied that ‘the relevant time is the purchase date’ (surprising all of us perhaps!?) and that the ‘PDS effective November 2017 still apply on your policy’ (sic). They also answered my query about changes to the PDS in a general way indicating change to the Cancel For Any Reason add-on and policy wordings giving the example of ‘non-traveller’. Meanwhile I called into our Flight Centre agent to request an updated PDS and ask which they thought applied - I was told the newer version would apply! she also thought the changes related to add-ons such as motorbikes and mopeds. We live in a regional town so I didn’t really want to make things awkward by making a formal complaint to Cover-More or Flight Centre and then run into my agent in the supermarket! It really is all so confusing and unfair to consumers who shouldn’t have to pick through all these details unless a need arises or we think a need will arise. I think we will have to assume the written emailed answer is the correct one(?). And thank you all at Choice for your ongoing efforts in trying to make this sector more accountable.

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The PDS states for the changes that “We will issue You with a new Combined FSG/PDS or a Supplementary FSG or PDS or other compliant document to update the relevant information except in limited cases”. What entails limited cases I am unsure what those cases would be? As for the changes they also note they will provide at no charge to you a paper copy of any “updated information” if you ring them on 1300 72 88 22.

The PDS sets out their terms and conditions (T&Cs) of the policy. This PDS must also be read in conjunction with their Financial Services Guide (FSG), & the Insurance Certificate they issued you for the complete picture of what the Insurance Policy covers you for and any risks involved in accepting the Policy.

So in your case ringing them and requesting the paper copy of the changes may by be a good first step to take. Then when you have that paper copy you can decide if the changes are not to your benefit.

The following is MY OPINION ONLY I am not a lawyer and so this advice cannot be relied upon…Get good legal advice to make sure what rights you have. There are free Community Legal Services that may be able to give you good advice and help for free if cost of getting advice is an issue.

I agree with your Travel Agent in that I believe the PDS you are under will be the new amended PDS until you start your travel when I think the conditions then become fixed by whatever PDS existed at the time your travel commenced. If the new changes are not ones you are happy with you may have the option of then cancelling…this will depend on what the Law allows. You should get some legal advice to assure yourself that you can withdraw or not or that you can withdraw from the policy without penalty as they state you have only 15 days after the Certificate is issued to withdraw without penalty. This may not be enforceable by them if the PDS etc changes are adverse to your circumstances.

As they have amended the PDS and or other policy documents and the PDS states they will send you a copy of the new PDS (and or other documents) they may have breached their PDS by not supplying you with the new ones. The limited cases section here needs defining as they may use that as their “escape” for not providing the new documents.

Making a complaint, or perhaps better put seeking clarification and a fixing of the issue of how the changes affect you should not create difficulty. You have invested your funds to ensure you are protected the way you want financially on your travels. If the insurance no longer meets your needs because of the changes and it ends up costing you a lot of money because you no longer have that coverage, the question you need to think on is >>>are you willing to risk your financial wellbeing by not getting it clarified rather than ensuring you are properly covered?<<<. Your Travel Agent & Cover-More should have no problem with you taking that step to clarify.

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I will not comment on the expertise or lack thereof of travel agents, but I will accept information from the actual provider. Since that is documented by the insurer (Cover-more) in email (eg writing) the changes made would only apply to future travel. The purchase date referenced would be the policy purchase date not the travel purchase date.

It would be in your interests to reconfirm it, but as a general statement the T&C of insurance you purchase is based on the T&C on the date it was purchased and cannot be unilaterally changed.

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The trouble is that their PDS does state they may and can change the PDS to the extent the Law allows them to do and if they do they will provide an updated FSG/PDS for the Policy purchaser/holder:

" Change of terms and conditions

From time to time and where permitted by law, We may change parts of the Combined FSG/PDS. We will issue You with a new Combined FSG/PDS or a Supplementary FSG or PDS or other compliant document to update the relevant information except in limited cases. Any updates which are not materially adverse to You from the view of a reasonable person deciding whether to buy this insurance, may be found on covermore.com.au. You can obtain a paper copy of any updated information without charge by calling 1300 72 88 22"

ASIC also advise that PDSs can be changed but if the change materially affects the PDS it becomes a new PDS. This means Cover-More would have to provide a new or supplementary PDS/FSG if the change was material.

“RG 168.134 Making a material change to a PDS has the effect of making it a new PDS, so that a new notification to ASIC must be made. Material changes may include:
(a) the correction of a misleading or deceptive statement in the earlier PDS;
(b) the addition of material required but omitted from an earlier PDS; or
(c) an update or addition to, or removal of, information contained in the earlier PDS”

&

"RG 168.162 Where the responsible person who prepares the PDS (in most cases the issuer) becomes aware that a PDS has become defective in a way that materially adversely affects retail clients, s1016E generally requires the issuer to take remedial action.

RG 168.163 Remedial action can include refunding any money received, giving the applicant a supplementary PDS or new PDS and one month to withdraw their application, or giving them a supplementary PDS or new PDS as well as one month to return the product and receive a refund.

RG 168.164 If a client has applied for a product on the basis of an out-of-date or otherwise defective PDS that is contrary to s1016E, they are entitled to return the product and obtain a refund under s1016F"

Those regulations are what it seems Cover-More are covering in their section regarding Change of terms and conditions eg issuing a new PDS. So changes can occur. They also say only those changes that are not materially adverse (ASIC refers to these as Immaterial Changes) to the policy purchaser/holder will be found on the Cover-More site. It doesn’t say where any adverse term changes will be found but they would be in the new Policy PDS/FSG at least as that is what is required by ASIC. As I wrote in my previous post it is worth getting the paper copy of the changes from Cover-More as they said they will provide them free of charge. If the policy purchaser/holder is unsure what effect the changes would have on them they should get legal advice.

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Thankyou again everyone. I phoned the 1300 number (it is actually Cover-more’s main number which then directs you to select service needed and then to enter your policy number) to ask for a paper copy of the PDS changes/updated information. I had the sense that the person on the other end hesitated to answer my question. I explained why I was interested to know what the changes in the PDS are about and that I had been given conflicting information. The officer could see my details and confirmed purchase date of 31/5/19 means the 2017 PDS applies to our policy.

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Would someone please tell me what a PDS is?

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PDS is the abbreviation for Product Disclosure Statement which is a document outlining theTerms & Conditions for financial products in Australia.

https://www.moneysmart.gov.au/glossary/p/product-disclosure-statement-pds

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Given that travel insurance is effective from the purchase date (one reason to buy early as soon as any significant funds have been paid as it generally covers cancellations etc) then the PDS in place at the time of purchase would be the one under which the policy would be valid until the term of the policy expires.

A new PDS (or terms and conditions) would apply to all new policies taken out after the date of change.

One thing that could throw a spanner in the works could be in the event of an incident that delays return to the home country beyond the original policy duration. If you then have to change your side of the contract (even through no fault of yours) by extending the period of cover, would this extra period come under the old or new policy. Consider the recent cyclone in Fiji that resulted in people being unable to return home because airports were closed. The extra accommodation and associated costs, changes to airline tickets etc may have been covered (depending on the terms of the insurance) if instigated before the expiry of the original insurance. But what if that expiry date passed and no contact with the insurance company was made or attempted? Would the insurance still cover the extra costs under the original policy or would they apply any new conditions which could include for example not covering major weather events because effectively the person has taken out a new policy?

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As I referred to above the PDS can change as the PDS actually notes that the changes will be notified to the policy holder if the PDS changes. ASIC also note that the PDSs can be changed but the holder of the policy can refuse the changes and obtain a refund of the policy “RG 168.163 Remedial action can include refunding any money received, giving the applicant a supplementary PDS or new PDS and one month to withdraw their application, or giving them a supplementary PDS or new PDS as well as one month to return the product and receive a refund”. Very clear that a PDS can be altered and a new PDS can replace the old one, it just gives the applicant/holder the right to refuse the new PDS and receive a refund…they would not then be covered by Travel Insurance which is their choice, they have 30 days after notification of the changes to do so. If they take longer than 30 days to decide they may find they have no right to a refund or perhaps the Insurer may refund an adjusted amount.

This would be the same for any financial product eg Term Life Insurance, Funeral Insurance, Loss of Income Insurance. Getting legal advice is the proper step to take to ensure that correct legal advice is received.

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