The liquidation of AVG Travels PTY Ltd on May 26 has left dozens of New Zealand travellers with losses of up to $30,000 each — and with travel insurance policies that became unenforceable the moment the operator selling them ceased to exist.

The Australian-based company, owned by Melbourne-based Duc Tiem Dao, ran a New Zealand-registered entity under the same brand, selling discounted tour packages across Asia and beyond. Travellers were caught mid-booking or mid-trip when the liquidator was appointed.

One Ōamaru woman had booked an 11-night China package for close to $7,000, including flights, accommodation, guided tours and a travel insurance policy arranged through AVG itself. When the company folded, that bundled cover folded with it.

AVG's email to affected customers told them to contact their insurance providers to "assess whether you can make a claim." For customers whose coverage AVG itself had arranged, the advice was useless. "Makes me feel very shitty, really," the woman told Stuff. She has lodged a complaint with the Banking Ombudsman and bought a standalone policy from a third-party provider for her next trip: "I won't be stung twice."

What does the collapse expose about bundled cover?

The case highlights a structural gap in how packaged insurance is distributed. A bundled policy is nominally a contract between the traveller and an underwriter. But when the tour operator is both the counterparty to the main transaction and the intermediary distributing the policy, its collapse can sever the consumer's practical access to coverage — particularly if the policy documentation was never independently held or clearly attributed to a licensed insurer.

For sellers of travel, the implication cuts both ways: bundling insurance drives package conversion and attachment rates, but it concentrates counterparty risk in a single vendor. Agents and operators who distribute third-party cover face the reputational fallout when the packaging intermediary fails.

How did payment methods shape the losses?

The Ōamaru booking split payments: roughly $600 on credit card, the balance by bank transfer. Chargebacks offer a recovery path only for the card-processed portion, and the process can take months. Bank transfers carry no equivalent consumer protection under current New Zealand arrangements.

John Downing, 71, of Christchurch, lost $4,400 on a China tour booked through AVG, though he arranged his own flights and insurance separately. "We didn't even know what hotel to go to," he said, describing the itinerary that arrived with hours to spare before the liquidator's notification. "We just sucked it up."

A Facebook group for affected customers has reported individual losses of up to $30,000, reflecting the range of package values involved.

How exposed is the New Zealand outbound market?

The collapse lands against measurable underinsurance. A survey of more than 1,200 adults by AA Travel Insurance, published in May 2026, found only 48% of Kiwi travellers take out cover on every overseas trip, while 21% rarely or never do. One in five respondents said they could not meet medical costs abroad.

Cover-More NZ claims data for the 12 months to February 2026 showed medical and dental treatment among the most frequently claimed categories, alongside trip cancellations and additional expenses.

Policy terms also vary widely. MoneyHub's March 2026 guide, drawing on more than 500 quotes from over 10 insurers across 20 destinations, found luggage protection ranging from $10,000 to $25,000 and medical limits from $10 million to unlimited — often separated by under $20 in price between basic and comprehensive options.

Notably, MoneyHub found New Zealand's consumer-facing travel insurance brands are underpinned by just four underwriters. Brand choice matters less than the certificate of insurance — a distinction agents and packagers will come under growing pressure to explain as liquidation fallout like AVG's accumulates.