By Daphne Zhang

Law360 (August 25, 2020, 3:15 PM EDT) -- Travel insurer Assicurazioni Generali Group asked a New York federal judge to toss a proposed class action accusing it of wrongfully withholding premiums for trips canceled due to COVID-19, saying the insured failed to allege a covered loss and cannot collect a partial refund of his "undivided premium."

Generali said Monday that the class representative bought a "single pay, single term" travel insurance that covers both "pre- and post-departure" risks and that he is not entitled to divide the premium and ask for a refund of a specific part of the insurance.

The carrier claimed that the policyholder was given 10 days to examine the policy and cancel it after he bought the insurance. But he never did so, and he cannot get any refund now, it said. The insured's calculation that Generali bore no covered risks because the trips never happened is "naive," the insurer added.

Generali was hit with the proposed class action in June by Florida resident Howard Morris, who bought a $1,298 travel insurance policy with Generali, alleging that the insurer refused to give any refunds of premiums paid for canceled trips despite his "numerous requests."

Morris contended that the bulk of his policy covers risks that occur during or after the trip and that only 0.77% of the policy pays for a pre-departure risk such as trip cancellation. Morris asked Generali to return the 99.23% of the premium that he claims pays for post-departure risks, which he says the insurer never assumed.

In Monday's memorandum, Generali said that Morris cannot separate the insurance to pre- and post-departure coverages and ask for a partial return of his paid premium, adding that the fact that the trip was later canceled does not mean that there was no risk for the insurer.

"There is no implied right to a partial refund of insurance premiums that are expressly non-refundable simply because part of the covered risk, or even some precursor to part of the covered risk, is not realized," Generali said.

The carrier said that Morris' attempt to attribute only $10 of the $1,298 premium to predeparture coverage for a $12,600 cruise is not "plausible" or "consistent with common sense," arguing that it did assume covered risks for predeparture trip cancellations.

"Plaintiff does not allege that Generali took on 'no risk,' only that it did not earn the 'part of the premium' that he attributes to post-departure coverage," Generali said.

The carrier cited case laws and claimed that insurance premiums are not "apportionable," and that a policyholder "may not have any part of his premium returned once the risk attaches, even if it eventually turns out that the premium was in part unearned, unless there is an agreement to that effect."

In addition, Generali said, the policy specifically allowed insureds to have 10 days to examine the coverage and request a refund after they bought the insurance and expressly stated that payment is non-refundable after the 10-day examination period. So Morris is barred from collecting any refunds, the carrier said.

The travel insurer has been hit with multiple proposed class actions in the past months. Last week, a proposed class of travelers asked the Judicial Panel on Multidistrict Litigation to consolidate a group of suits against the American unit of Generali, saying consolidation is appropriate to streamline claims that the insurer failed to pay up on policies for trips canceled because of COVID-19.

Earlier this month, a Kansas woman brought the carrier to federal court, alleging that it wrongly denied coverage after she had to cancel trips because her daughter was exposed to COVID-19, and the family needed to go under quarantine. The class complaint claimed that trip cancellation and quarantine due to unforeseeable events are explicitly covered by Generali's travel insurance.

In July, a Texas woman sued Generali in another proposed class action over the insurer's refusal to cover canceled road trips and accommodations for her daughter's wedding in Florida. She alleged that Generali had promised to send "detailed explanations" for the coverage denial but never did.

Counsel for the parties could not be immediately reached for comment.

Howard Morris is represented by David E. Kovel of Kirby McInerney LLP, Bryan L. Clobes of Cafferty Clobes Meriwether & Sprengel LLP, and Joeseph Sauder of Sauder Schelkopf LLC.

Generali is represented by Christopher James Houpt and Ilana Cohen of Mayer Brown LLP.

The case is Morris v. Assicurazioni Generali Group SpA et al., case number 1:20-cv-04430, in the U.S. District Court for the Southern District of New York.

--Editing by Alyssa Miller.

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