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Be prepared to disclose all pre-existing medical conditions

John suffers a medical event

Caroline and John booked a trip to Asia, the Middle East and Europe. They were due to begin their holiday in late August 2014. On 27 July 2014, John was admitted to hospital after suffering a stroke. Caroline and John had to cancel their trip. They were able to recoup some of their pre-paid travel expenses, but they still incurred cancellation costs of $16,800.

Caroline and John had purchased travel insurance with Journey Insurance (“Journey”). They made a claim for their cancellation costs.

Journey declined Caroline and John’s claim because it said that the cancellation costs resulted from a pre-existing medical condition of John’s. Journey’s policy excluded cover for costs resulting from pre-existing medical conditions, unless the conditions had been disclosed and Journey accepted to cover the conditions. Journey advised that if John had disclosed his history of strokes, Journey would not have provided John with cover for any pre-existing medical conditions.


Caroline and John’s view

John said he had disclosed all his pre-existing medical conditions, including his history of strokes, to Journey during a telephone conversation. John said Journey had told him he was “covered for everything”.

Caroline and John said that even if John had not disclosed his history of strokes to Journey, Journey should still pay for Caroline’s ‘half’ of the cancellation costs. Caroline and John argued that Journey should have told them that if they had to cancel their trip due to John suffering a medical event for which there was no cover, that Caroline would also have no cover. They said that if Journey had told them that John and Caroline may not have cover in some circumstances, Caroline would have sought other cover, or they may not have booked the trip at all.


FSCL’s view

We considered that Journey were entitled to decline Caroline and John’s claim.

Our case manager listened to John’s conversation with Journey where John said he disclosed all of his pre-existing medical conditions. John had disclosed a number of pre-existing medical conditions to Journey, however, he had not disclosed his history of strokes.

It was clear that John’s history of strokes fitted within the policy’s definition of a pre-existing medical condition. As Caroline and John’s loss occurred directly as a result of a pre-existing medical condition and Journey’s policy excluded cover for non-disclosed pre-existing medical conditions, it followed that there was no cover under the policy.

We did not doubt that John’s non-disclosure of his history of strokes was a genuine mistake. However, it was John’s responsibility to disclose all pre-existing medical conditions, otherwise there was no way that Journey could fully assess the risk of insuring John.

The policy was clear that there was no cover if the costs were incurred as a result of a pre-existing medical condition of you or ‘any person travelling with you’. As Caroline and John were going to travel together, the exclusion clause applied to exclude cover for the cancellation costs incurred by both John and Caroline.

Insured persons are obliged to read and understand their insurance policy. Unfortunately, Caroline and John were unaware that if cancellation occurred because of a pre-existing medical condition not covered under the policy, there would be no cover. However, Journey did not act incorrectly by not pointing out the relevant sections of the policy. Caroline and John were responsible for reading and understanding the policy.

We considered that Journey was entitled to decline Caroline and John’s claim for cancellation costs and recommended Caroline and John withdrew their complaint.