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A not too sweet ending: medical conditions required to be disclosed to insurers

Anthony plans a trip to Europe

In February 2014 Anthony booked a trip to travel around Europe from 22 August 2014 to 22 September 2014. Anthony purchased travel insurance through Globe Insurance (“Globe”) on 20 June 2014.

Unfortunately before Anthony was due to depart on his trip he fell ill with the flu and had to cancel. Anthony was a diabetic and the flu made his blood sugar levels more difficult to control.

Anthony made a travel insurance claim to Globe. Globe declined his claim under the policy’s pre-existing medical condition exclusion clause.


The policy

The policy’s exclusion clause stated that Globe would not pay for any claim that “arises directly or indirectly from, or is any way connected with, any pre-existing medical condition”.

However, the policy also provided that Anthony could be automatically covered for claims arising from his pre-existing diabetes, unless Anthony had been hospitalised for his diabetes in the 24 months prior to the policy being issued. If Anthony had been hospitalised for diabetes in the previous 24 months, the policy required him to contact Globe and undergo a medical assessment.


Globe’s view

Globe believed that it was entitled to decline Anthony’s claim because he had not disclosed that he had recently been hospitalised for his pre-existing diabetes condition.

When assessing Anthony’s claim, Globe received a medical report from Anthony’s doctor and declined his claim on the basis of the report. Anthony’s medical records showed that he was admitted to hospital on 21 February 2014 and on 19 July 2013 with hypoglycaemia as a result of diabetes.


Anthony’s view

Anthony believed that Globe incorrectly declined his claim. Anthony said he did disclose to Globe that he had diabetes. He said that he telephoned Globe soon after he purchased the insurance policy on 20 June 2014. Anthony argued that Globe should have asked him further questions when he disclosed that he had diabetes to assess whether he could be automatically covered for the condition, and to outline how any claims may be affected.


FSCL’s view

In our view, Globe was entitled to decline Anthony’s claim under the policy.

The fact that Anthony had been hospitalised as a result of his diabetes within 24 months of purchasing the policy meant that he was required to disclose this to Globe and undergo a medical assessment. The reason insurance companies have this requirement is so customers contact the insurance company to discuss their medical conditions in more detail. Because Anthony had a duty to disclose his diabetes condition to Globe, it followed that Anthony had to prove that he had disclosed his diabetes.

Anthony’s evidence was that he called Globe but he was not sure when he called or what number he called from. Globe said it records all medical assessment calls and that it had been unable to locate recordings of Anthony’s call. Weighing the evidence, we considered that it was more likely than not that Anthony did not make the telephone call and the diabetes condition was not disclosed.

We recommended that the claim was not upheld and that Anthony’s complaint should be discontinued.