For Kiwis going overseas, the Middle East is the connective tissue of modern long-haul travel. In these first days of a new US-Iran conflict, that connectivity has become a vulnerability: airspace closures, damaged infrastructure and rolling airline suspensions have turned transit hubs into bottlenecks, leaving travellers marooned mid-journey and forcing brokers into real-time crisis counselling.
“This is shaping up to be one of the most significant travel insurance events in recent memory,” said Michael Storozhev (pictured), chief underwriting officer with PassportCard Australia.
Storozhev’s assessment suggests the heart of the Australia-New Zealand insurance exposure. While conflict events can sometimes be geographically contained from an insurance perspective, the Gulf is different: Dubai, Abu Dhabi and Doha are pivotal transfer points for Australians and New Zealanders heading to Europe and beyond. When those hubs are directly impacted, the knock-on effects land immediately in local call centres and broker books.
Canberra has warned the disruption footprint is large. Foreign Minister Penny Wong said Australia has about 115,000 Australians in the region as countries shutter airspace, underscoring how many people could be caught by even short-lived shutdowns. New Zealand’s SafeTravel has likewise warned that airspace closures around Middle East transit hubs can impact flights globally - past events show clearing the backlog of stranded passengers takes time. Reports suggest hundreds of travellers are spending nights sleeping in airports.
So the disruption isn’t only about flight schedules; it’s about people sleeping in airports, missing onward connections and navigating rapidly changing airline options while trying to keep medical cover intact.
For brokers, a big challenge is customer expectations. When customers are stranded and spending money fast, the first assumption is often that “insurance will pick it up” and that is exactly where complaint risk and reputational damage can escalate quickly. The coming days will continue to bring a familiar pressure-point for brokers: documenting what clients were told, directing them to airline waivers and refunds and then carefully explaining where war exclusions draw a hard line - without losing the customer relationship.
PassportCard - and other insurers - said Storozhev, are now focused on the practicalities of meeting this challenge as best they can.
“We’ve been trying to get in touch with as many customers overseas as possible,” he said.
For brokers speaking with worried callers, the most important message is also the most difficult to deliver: in most cases, mainstream travel insurance won’t pay for losses directly caused by war.
Storozhev said his understanding - shared “across the industry” - is that policies do not cover losses directly caused by war and that flight disruption due to airspace closures linked to the conflict will generally not be claimable. For many Australian and New Zealand travellers, the most immediate costs are exactly those disruptions: replacement tickets, additional accommodation, meals, missed tours and other downstream expenses.
Travel insurance is priced for high-frequency, individually distributed risks - medical events, theft, illness-related cancellation - not for systemic, correlated shocks that affect huge numbers of travellers at once.
“We understand that travel insurance has never covered acts of war,” he said. “The scale and unpredictability of armed conflict make it very difficult to insure through standard premium structures.”
Storozhev said his firm is not aware of any insurer or reinsurer that could accurately price for a war-related travel insurance exposure.
So his advice is operational and immediate: travellers should contact their airline or travel provider directly, as some carriers are offering free rebooking. In practice, that places airlines and travel agents at the front of the financial remedy for itinerary changes - while insurers are often left managing expectations, explaining wording and providing assistance where it still applies.
For local brokers, that translates into a familiar but high-pressure job: separating what feels unfair from what is contractually excluded and doing so in plain language at speed - often while travellers are in transit and emotions are running high.
It also highlights a key practical distinction many consumers miss: a traveller can be in genuine distress - stuck, exhausted, out of pocket - without being in a claimable situation under the policy, if the proximate cause is war and related airspace closure. That doesn’t make the customer’s problem any smaller but it makes the broker’s role in guiding next steps even more valuable.
If the war exclusion is the hard boundary, the industry’s credibility is built on what happens inside it - especially around medical protection, emergency assistance, and practical support when people cannot physically get home.
PassportCard’s immediate move, Storozhev said, is to extend cover for customers who are stranded and unable to return to Australia, so their policies don’t simply expire while they are stuck through no fault of their own. The extension is designed to keep customers covered for insurable events - most importantly an unexpected medical emergency - during an involuntary extension of travel.
In its travel advisory to customers, Cover-More said that any claim outcome depends on the policy purchased and individual circumstances. The insurer said that for customers who bought cover before a specific time cutoff there “may be cover available” for certain additional expenses or trip amendments if directly impacted. It then leaned heavily into claims triage: lodge quickly through the Online Claims Portal or brokers can lodge with customer consent.
This response is mirrored by other travel insurers who are also aiming to centralise advice, standardise messaging, funnel non-urgent matters into digital claims workflows and protect emergency capacity for travellers who are genuinely stuck or medically vulnerable.
This conflict is already a stress test of the travel insurance operating model: how quickly insurers can locate and support customers, how well brokers can set expectations without inflaming disputes, and how effectively the industry can keep travellers protected for what is insurable - especially medical emergencies - even when the itinerary itself has become uninsurable chaos.
