Arch Insurance Class Action Lawsuit Seeks Refunds For Cancelled Trips

A student has filed a proposed class action lawsuit against Arch Insurance alleging the company is wrongly denying claims from travel insurance policyholders whose trips were cancelled due to coronavirus.

Lead plaintiff, Carter Adnams, and his father say that Arch Insurance refused to honour Carter’s trip insurance policy after his plans to visit Costa Rica in March of 2020 were cancelled by COVID-19. They say they are not the only ones who were affected by unfair claim denials and seek to represent other customers who are out hundreds or even thousands of dollars for trips they thought they had insured.

Cancelled Plans, Broken Promises

The Adnams say that they paid over $3,000 for a school trip to Costa Rica through a travel company called Explorica, along with a travel insurance policy through Arch that should have covered the cost of the cancellation. The policy they purchased allegedly covered student trips through Explorica between Jan 1, 2016 and April 30, 2019.

Carter’s trip was scheduled for March 13 through 20, 2020. The Adnams had paid for the trip in full by January. According to the Arch Insurance class action lawsuit, the trip was run through the school and specifically insured through an Arch plan meant to cover school trips. On March 10, 2020, the Admans say that they and other families received a letter from the school indicating that, due to the rapid increase of coronavirus cases in Costa Rica, the student trip would be cancelled.

According to the complaint, the Arch Insurance policy covered cancellations of Adnams and other student trips due to the following:

• The death of a family member prior to departure
• Sickness or injury requiring medical treatment prior to departure
• Teacher labour strike
• Potential risk of harm as determined by the school board
• Other cancellation by the school board

The plaintiff says that the company that organized the trip, Explorica, filed a trip cancellation claim with Arch on April 4, 2020 for all students who were unable to go to Costa Rica. However, the plaintiffs say that Carter’s and other students’ claims were denied.

“Despite not disputing the Plaintiff’s eligibility under the Policy, Arch has refused to pay the Plaintiff his insured benefits in accordance with the terms of the Policy,” states the Arch Insurance class action lawsuit Canada.

“By continuing to withhold payment owed to the Adnams family and others impacted by the cancellation of school trips, Arch has failed to deliver the peace of mind that their customers rely on when paying for their services,” noted a lawyer representing the plaintiff in a statement.

Companies Play the Blame Game

According to the proposed Arch Insurance class action lawsuit, Arch is blaming Explorica for failing to provide the necessary information required to make a determination on the Adnams and other students’ insurance claims. Explorica, a company that is facing another class action lawsuit over cancelled travel plans, allegedly says that it provided all necessary information. The plaintiff asserts that Explorica’s actions are “irrelevant” when it comes to Arch’s alleged breach of contract and other violations of its policy.

The complaint points out that the Adnams and other families who were insured through Arch for student trips are not in default of their policies and that withholding payment on their claims is wrong.

“Arch and Explorica are pointing the finger of blame at each other, leaving countless families in financial limbo,” one of the lawyers representing the plaintiff said in a statement about the proposed class action lawsuit. “The fact is that Arch and other travel insurance providers must honour their contractual obligations under the travel policies they issued, and pay these legitimate travel insurance claims immediately.”

Arch Insurance Company Allegedly Misinterprets Own Policy

The proposed class action lawsuit asserts that Arch Insurance is in violation of its own contract with the plaintiff and others who purchased travel insurance. The plaintiffs say that a plain reading of the policy they purchased shows that they are entitled to a payout for Carter’s cancelled trip.

The class action lawsuit seeks to represent those who held travel insurance through Arch since April 15, 2018, whose claims were denied or not paid in full by the company. The lawsuit is seeking damages, including reimbursement for Class Members’ trips under their insurance policies, as well as punitive and exemplary damages that will deter Arch Insurance from “bad faith” denials in the future.

This is not the first class action lawsuit to be filed against an insurance company over allegedly wrongly denied claims for cancellations due to coronavirus. TD Bank was hit with an action in September alleging that it is refusing to pay a travel insurance claim.

Did you have a trip cancelled due to the coronavirus pandemic? Were you able to recoup your expenses through trip insurance? We want to hear about your experience! Tell us in the comment section below.

The lead plaintiff and proposed Class Members are represented by Sivan Tumarkin and James Fireman of Samfiru Tumarkin LLP, as well as Jordan Goldblatt, Gordon McGuire, and Alex Fidler-Wener of Adair Goldblatt Bieber LLP.

The Arch Insurance Trip Refund Class Action Lawsuit is Adnams v. Arch Insurance Canada Ltd., Case No. CV-20-00649430-00CP in the Ontario Superior Court of Justice, Canada.

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