Allianz Hit With Class Action Lawsuit Over Travel Insurance

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AGA Service Company (also known as Allianz Global Assistance USA) and Jefferson Insurance Company were hit with a class action lawsuit filed by customers who allege that the travel insurance companies unfairly kept their policy payment for post-departure coverage on cancelled trips.

Lead plaintiffs Fazilat Kazeminezhad and Brett Lashlee allege in their travel insurance class action lawsuit that Allianz and Jefferson should have returned the portion of their and other customers’ policy payments meant to cover post-departure events when the customer decided to cancel the trip without departing.

“Travel insurance is available to cover a wide array of perils associated with travel, including both pre-departure risks, such as the possibility that a traveler will lose pre-paid nonrefundable deposits or payments if a trip needs to be canceled prior to departure, as well as risks that arise exclusively post-departure, such as interruption of a trip, medical or dental emergencies during a trip, and baggage being lost, stolen or damaged during a trip,” the Allianz class action lawsuit alleges. “By its nature, this second category of coverages — exclusively for post-departure risks — is insurance coverage providing indemnification for travel related perils that can only arise after travel is underway.”

The plaintiffs allege that the defendants should know which portion of a policy payment covers pre-departure events and which covers post-departure events. “Travel Insurance Plans sold by Defendants include at least some travel benefits that are applicable exclusively post-departure, meaning that Defendants are not at risk of having to cover the associated risks prior to commencement of actual travel by the insured,” say the plaintiffs in their travel insurance class action lawsuit.

“Defendants can readily identify the pro rata share of the gross premium which is attributable to each policy benefit purchased by each insured under that person’s specific plan,” further allege the plaintiffs in their Allianz class action lawsuit.

The plaintiffs argue that because the defendants do not have to cover post-departure events or “perils,” they have not earned that portion of the policy payment and should return this part of the payment to customers who cancel their travel plans prior to departure; however, according to the travel insurance class action lawsuit, Allianz has adopted a no-refund policy when it comes to these policy payments.

“Contrary to the non-refund policy adopted by Defendants,” the travel insurance class action lawsuit alleges, “when an insured cancels his or her trip prior to departure, Defendants are obligated to return the portion of the premium paid for coverage of risks that are only applicable post-departure.”

The plaintiffs explain that “[t]his is because the portion of the gross premium paid in exchange for these exclusively post-departure benefits is unearned, inasmuch as Defendants were never at risk of having to cover the perils of actual travel. Thus, in this precise situation, Defendants have failed to provide any consideration in return for the portion of the gross premium which must always be paid in advance of travel for any of the provided coverages, including post-departure perils.”

The plaintiffs seek to represent a nationwide Class of customers who purchased Allianz or Jefferson travel insurance, cancelled their travel plans prior to departure and were not refunded for the portion of their policy payment that would have covered post-departure events. The plaintiffs also seek to represent a subclass from California and Tennessee.

The plaintiffs claim the defendants have been unjustly enriched by the practice and those funds should be remitted. Additionally, the plaintiffs claim that the defendants have violated California and Tennessee state laws.

The plaintiffs are represented by Ingrid Evans of Evans Law Firm.

The Allianz Travel Insurance Class Action Lawsuit is Kazeminezhad v. AGA Service Company, et. al., Case No.3:15-cv-05087, in the U.S. District Court for the Northern District of California.