In early 2019, Nigel and Jenni booked a trip to Australia for July 2019. On 9 May 2019, Nigel had a severe allergic reaction and was admitted to hospital. The hospital doctors and Nigel’s GP thought that the cause of Nigel’s allergic reaction was a new breakfast cereal he’d started eating a few days before. The plan was that Nigel would stop eating the cereal, and his GP placed him on a waiting list to meet with a specialist to investigate the cause of the allergic reaction.
By 24 May Nigel had not met with the specialist, so he and Jenni booked another trip to America for August 2019 and bought a travel insurance policy at the same time. By July 2019, the specialist’s appointment still had not been scheduled. Nigel’s GP wanted him to have the appointment before taking the trip to Australia but, in any event, prescribed him some EpiPens to take to Australia.
Nigel’s second allergic reaction
Nigel and Jenni returned from their Australia trip in mid-July. A few hours after they returned, Nigel had another severe allergic reaction and was admitted to hospital again.
Having not consumed the cereal since the first episode in May, Nigel thought the allergic reaction might have been caused by some artisan chocolate he’d bought in Australia and ate on the plane. However, a doctor at the hospital noticed that Nigel was on a medication with a common side effect of causing severe allergic reactions.
Nigel had been taking the medication since early 2018. However, he’d only had his first allergic reaction in May 2019 because over that time the allergic agent in the medication had built up to the point that it caused a severe allergic reaction. Nigel’s GP advised him he was not fit to travel to America a month later, and Nigel and Jenni cancelled that trip.
The claim for the America trip
Nigel and Jenni made a claim to their travel insurer for the costs of the America trip they’d been unable to recoup ($3,068). The insurer declined the claim based on two exclusion clauses in their policy:
a) a pre-existing medical condition exclusion clause (the PEMC exclusion), and
b) an exclusion applying if Nigel and Jenni knew of a reason why their trip may be cancelled, before they purchased the American trip and their insurance policy (the pre-existing knowledge exclusion).
Nigel and Jenni did not accept the insurer’s decision, and they complained to FSCL.
In relation to the pre-existing knowledge exclusion, the insurer said that because Nigel and Jenni knew Nigel had suffered from the allergic reaction on 9 May 2019, they would have been aware that this may occur again and affect future travel.
In relation to the PEMC exclusion, the insurer said that although Nigel had not been diagnosed with a specific medical condition following the 9 May episode, the exclusion applied in situations where a person was suffering symptoms or had suffered a relevant medical event prior to purchasing the insurance.
Nigel and Jenni said that although, of course, they knew about Nigel’s allergic reaction on 9 May, they thought this was a one-off event and had been resolved when Nigel stopped eating the cereal. They said it would not have made sense for them to purchase the American trip, or travelled to Australia, if they thought Nigel would have another allergic reaction.
We said that the pre-existing knowledge exclusion applied to exclude Nigel and Jenni’s claim. This was because Nigel’s GP had prescribed him EpiPens, in May, to take on the trip to Australia in July. It was at least reasonably foreseeable, when the American trip was booked on 24 May, that Nigel could have another allergic reaction that could affect the trip.
We also said that the PEMC exclusion applied, but for slightly different reasons from the insurer. The wording of the exclusion said that there is no cover where, at the time the insurance is purchased, a person is awaiting a specialist’s opinion, or if a person had been hospitalised for the relevant condition within the previous 24 months. Both of these situations applied to the circumstances of Nigel and Jenni’s claim.
Nigel and Jenni did not accept our view and said they would be taking the matter further with their lawyer.
Insights for consumers
Travel insurance exclusion clauses can be wide, especially PEMC exclusion clauses. Although we could appreciate that Nigel and Jenni thought that the specialist’s appointment was simply a ‘follow up’ and the specialist would confirm Nigel had reacted to the cereal, this turned out not to be the case.
Travel insurers will often exclude cover in situations where a person is awaiting a specialist’s appointment. This is because, while waiting for a specialist’s opinion, there are uncertainties around medical conditions. That uncertainty means there is a greater risk that a person’s travel may be affected, and an insurer is entitled to limit the risk of having to pay claims in those circumstances.