On 8 May, while Ines and Daan were travelling in the Netherlands, Daan suffered a brain haemorrhage and was admitted to hospital. On 11 May, Ines had seen a doctor because she developed a cough and was not dealing with the stress of the situation. Ines’s doctor suggested both her sons, Otto and Tomas, travel to the Netherlands to assist Ines while their father was sick.
Also on 11 May, Ines contacted her travel insurer to advise Daan was in hospital, and to start the process of making a claim for his medical care and associated expenses. Ines informed the insurer her two sons were due to arrive in the Netherlands the next day.
Sadly, on 19 May, Daan passed away.
The cremation of Daan’s body was arranged and, on 29 May, the family flew home to New Zealand with Daan’s remains.
Most of the family’s costs were covered by the insurer. However, the family also claimed the costs of Otto travelling to the Netherlands and living costs while he was there. The ‘accompanying person’ section of the insurer’s policy provided cover for one person to travel overseas to be with a customer who is very unwell to, for example, assist the customer in returning home to New Zealand. The ‘accompanying person’ section only applied to one person, so the family never expected to claim for Tomas’s costs.
The insurer declined to cover Otto’s costs because, under the policy, a customer has to seek confirmation about cover from the insurer before a person travels to be with their family member overseas, which the family had not done.
In addition, the insurer pointed to Ines’s GP’s report saying she was suffering severe emotional stress when Daan fell ill and passed away. The insurer said its mental health exclusion, specifically excluding claims related to stress, also applied to exclude the claim.
When the claim was declined, the family complained to FSCL.
The family said the policy provided cover for Otto’s costs. They said it was clear Ines could not cope with the situation and that, although she was suffering from stress when Daan fell ill and then passed away, the underlying reason for this was because Daan had become unexpectedly sick and passed away.
The family also complained about the insurer’s service. In their view:
a) It took too long to confirm cover for Daan’s medical care and associated expenses, and to confirm Daan’s cremation arrangements.
b) They always had to follow up with the insurer.
c) The insurer did not assess their claim within a reasonable time period after their return to New Zealand.
The insurer’s view
The insurer considered it had provided reasonable service to the family. It said it was in constant contact and at times it was waiting on information from third parties to be able to progress matters.
Awaiting the medical report
From 11 May to 16 May, the insurer was waiting on a medical report from the hospital. We found the insurer was entitled to require the medical report before it confirmed cover and it could not have done any more to expedite the report. In addition, from our experience of investigating travel insurance complaints, it can take some time for hospitals to forward medical reports to insurance companies.
Confirmation of the cremation arrangements
It took the insurer three days following Daan’s death to confirm the cremation arrangements because it was awaiting two quotes. We said in circumstances where there has been an overseas death, the insurer could have acted more quickly to confirm arrangements by accepting the first quote (because it appeared to be within a reasonable expense range).
However, overall, we did not consider the delay to be unreasonable. When there is an overseas death, and particularly when a third party such as an insurer is involved, it is always going to take a certain amount of time for arrangements to be made.
Processing the claim
Under the Fair Insurance Code 2016, if a person makes a complaint, an insurer must make a decision on the complaint within 10 business days of having all the information it needs to make a decision. If more information is required, the insurer needs to tell the customer this, and then keep the customer updated every 20 business days on progress in making a complaint decision.
Unfortunately, the insurer failed to update the family within one of those 20 business day periods, and we suggested the insurer pay $50 for the inconvenience this caused.
The accompanying person benefit
We said there was no cover under the accompanying person benefit for Otto to travel to accompany Ines. This was because of the mental health exclusion under which any claim relating to Ines being under stress was excluded.
However, the policy said the insurer would pay for an accompanying person to travel from New Zealand when an insured is gravely ill. Ines was unable to fully support Daan before he died, as she was suffering from severe stress and became ill. This meant someone else needed to be Daan’s accompanying person. We said Otto was Daan’s accompanying person.
The family should have contacted the insurer prior to Otto and Tomas travelling to the Netherlands. However, in the circumstances, we said even if contact had been made, the insurer’s decision should and would have been to cover the costs of one of the brothers travelling to be with their father, Daan, who was gravely ill.
The insurer agreed with our suggestion and offered to pay Otto’s costs ($3,628) and a further $500 in inconvenience.
The family accepted the offer and the complaint was resolved.
It can take longer than customers expect for insurers to be in a position to confirm cover when people are travelling overseas, and then make necessary arrangements to bring customers home. However, to a certain extent, delays in these situations are inevitable.
This complaint is also a good example of FSCL’s role – we will analyse an insurer’s policy to make sure the insurer has correctly applied the policy wording to decline a claim. On occasions we find the policy wording has not been applied correctly, and that the claim should be paid.