Many travel insurance companies are refusing to pay out full refunds for trips cancelled because of Covid 19.

Consumer New Zealand says only 11 out of 28 companies offered full refunds.

Chief executive Jon Duffy told Kate Hawkesby the contract terms which allow companies to avoid refunds or charge customers a penalty fee if a refund is given are unfair.

He says parts of the Fair Trading Act don't apply to the insurance sector.

"The insurance sector has got itself a whopping great exception out of those terms that no other sector in New Zealand has."

And there is little hope for travellers to get their money back.

Duffy says only the Commerce Commission can take a case to court on behalf of a consumer to get the contracts declared as unfair.

"We think consumers should have the right to take their own action. Since 2015 when these provisions came into place, there has only been one case that made it through the court."