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AIG, NUFIC No Partial Refunds on Travel Insurance Class Action

Is it proper to charge a single lump premium for travel insurance? The complaint for this class action says it is not, because travel insurance covers two different sets of risks. One set involves pre-departure risks; the other, post-departure risks. The complaint brings suit against National Union Fire Insurance Company of Pittsburgh, PA (NUFIC) and American International Group (AIG), alleging that amounts paid for post-departure risks should be refundable if a trip is cancelled.

The class for this action is all persons (including corporations and the like) in the US who, during the longest applicable time permitted by the statute of limitations period, bought a travel insurance policy from NUFIC and AIG, for a single, lump-sum premium, that included both pre- and post-departure benefits for a trip that was cancelled before the departure date. A Pennsylvania Subclass has been defined for persons in the above group in Pennsylvania.

The complaint says AIG is a very large insurance and financial services company, and NUFIC is one of its subsidiaries.

When the companies sell a travel policy, the risks are bundled together for a single premium. However, travel policies involve two different types of risks, claims the complaint: the risk that the trip will be cancelled before departure, covering prepaid, nonrefundable payments; and the risk that something unforeseen will happen after departure, covering things like trip interruption and medical emergencies while traveling.

The second type of risk, the complaint argues, should be refundable if the trip is canceled prior to departure, because in that case, the insurance company never assumes these risks and is never exposed to them. At the moment, the complaint alleges, in such a case, companies do not refund any portion of the premium. The complaint alleges that this is “unfair, unjust, and unlawful.”

The plaintiff in this case, Nicholas Seibel, booked and insured two trips.

The first was to be from Boston, Massachusetts to Paris, France, departing October 7, 2020 and returning October 17, 2020. The insurance premium for this trip was $440.98.

The second was a Caribbean cruise, departing from Miami, Florida on November 7, 2021 and returning on November 12, 2021. The insurance premium for this trip was $342.58.

Seibel cancelled the France trip in August 2020. The complaint alleges that the insurance companies would not refund any of the premium and only gave him a travel insurance credit voucher that was good only for a limited time. The cruise line canceled the cruise trip in June 2021 and refunded Seibel’s payments, but the complaint alleges that the insurance companies would not refund any of the premium for that travel policy.

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

AIG, NUFIC No Partial Refunds on Travel Insurance Complaints

February 23, 2022

Is it proper to charge a single lump premium for travel insurance? The complaint for this class action says it is not, because travel insurance covers two different sets of risks. One set involves pre-departure risks; the other, post-departure risks. The complaint brings suit against National Union Fire Insurance Company of Pittsburgh, PA (NUFIC) and American International Group (AIG), alleging that amounts paid for post-departure risks should be refundable if a trip is cancelled.

AIG, NUFIC No Partial Refunds on Travel Insurance Complaints

Case Event History

AIG, NUFIC No Partial Refunds on Travel Insurance Complaints

February 23, 2022

Is it proper to charge a single lump premium for travel insurance? The complaint for this class action says it is not, because travel insurance covers two different sets of risks. One set involves pre-departure risks; the other, post-departure risks. The complaint brings suit against National Union Fire Insurance Company of Pittsburgh, PA (NUFIC) and American International Group (AIG), alleging that amounts paid for post-departure risks should be refundable if a trip is cancelled.

AIG, NUFIC No Partial Refunds on Travel Insurance Complaints
Tags: Failure To Pay For Refund, Insurance, Travel Insurance