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I’m sick, but not sick enough’ to meet the policy definition of ‘cancer’

Diane’s diagnosis

Following a routine mammogram in August 2014, Diane was referred for a biopsy and it was found that she had ‘DCIS’ (Ductal Carcinoma in Situ), a common type of non-invasive breast cancer. The cancer starts inside the milk duct, and is called ‘non-invasive’ because it has not spread beyond the milk duct. DCIS can become invasive.

Following another biopsy, also showing DCIS, surgery was recommended. Diane immediately took the action her doctors recommended and in November 2014, Diane underwent a full left mastectomy.


Diane’s claim

In 2010, Diane took out a policy specifically marketed for female specific cancers. The policy provided for a lump sum payment of $25,000 if Diane was diagnosed with breast cancer. Diane submitted a claim. However, the insurer declined the claim based on an exclusion clause stating there was no cover for tumours described as ‘non-invasive’. Diane complained to FSCL.

Diane argued the insurer should pay her claim because she considered the policy to be contradictory. Diane said the definition of ‘cancer’ in the policy was a ‘malignant tumour’ being a ‘mass of cancer cells that may invade surrounding tissue or other parts of the policy’. Diane said the policy did not make sense because it excluded cover for tumours/cells which had not actually invaded surrounding tissue.

Diane also said that because of the early detection of the cancer and her mastectomy, the cancer did not spread and she had mitigated the risk of the cancer getting worse. Also, because the policy was marketed specifically to cover female specific cancers, Diane always thought she would be covered for all types of female specific cancer. Nowhere in the original letters sent to Diane with her policy did it say that some non-invasive cancers may not be covered and she said the insurer had misled her about the extent of cover the policy provided.


Our review of the insurance policy wording

When analysing whether there is cover under a policy, our first step is to assess whether the insuring clause (the section of the policy that provides cover), has been met.

Under the particular insuring clause, there had to be a positive diagnosis of cancer, meaning a mass of cancer cells (a tumour), that may invade surrounding tissues or spread to distant areas of the body. It was clear from the medical evidence on file that Diane had a tumour that may become invasive.

However, the insuring clause also required the tumour to have characteristics of uncontrolled growth, a spread of malignant cells, and invasion of tissue at the ‘primary site’ (in Diane’s case, the milk duct).

There was no evidence in Diane’s case that the growth of malignant cells was uncontrolled, or had invaded tissue outside the milk duct. It appeared Diane did have a form of cancer, but not ‘cancer’ as that was defined in the policy. Also we said the exclusion clause would apply because all the medical evidence confirmed Diane’s DCIS was non-invasive.


Difficult decision

It was difficult for us to make a decision in this complaint. Diane had taken her doctors’ advice that the best option for her was the mastectomy. The medical evidence said that because it is impossible to know in which patients DCIS will become invasive the recommended action is surgery. We agreed with Diane that she took the action anyone would take in the circumstances to prevent endangering her life.

We could also understand why Diane considered it unfair she was not covered, because she went through the same process and treatment another person who would meet the definition of ‘cancer’ in the policy would have, but her claim was not paid. In other words, Diane said it was unfair that she took action to prevent herself getting sicker, but because she was not ‘sick enough’ she did not have cover.


Insurer’s decision about the risk it is prepared to carry

The medical evidence showed that only 30-40% of DCIS becomes invasive, meaning in 60-70% of cases, surgery is only preventative treatment. That is, the insurer was only prepared to cover the risk of the 30-40% of people whose DCIS become invasive. We noted that insurers are entitled to decide the level of risk they are prepared to cover in writing policies.


Could the insurer have done more to highlight that some cancers may not be covered?

We thought the insurer could have done more to highlight there may not be cover for some types of non-invasive cancer. The information the insurer sent Diane when she took out the policy certainly gave the impression that if she was ever diagnosed with cancer, she would receive a lump sum payment.

It appeared a reasonable number of people insured under this particular policy, would develop DCIS which would not become invasive. We thought the insurer could have said in the letters to Diane that some non-invasive cancers may not be covered, or at least asterisked ‘cancer’ and referred to the policy definition.


Did the insurer mislead Diane?

However, to find Diane had actually been misled by the insurer we had to be satisfied that she would not have taken out the policy if the insurer had pointed out that some non-invasive cancers may not be covered. It may have depended on what Diane knew about DCIS and the difference between invasive and non-invasive cancers. Diane was also responsible for reading and understanding the insurance policy.

With a history of breast cancer in Diane’s family, we thought Diane may have decided to continue with the policy in any event.

Diane had had a stressful year. Some of that stress and inconvenience could have been alleviated if the insurer had highlighted from the beginning that there may not be cover for non-invasive cancers. We suggested the insurer pay Diane $1,000 in recognition of the stress and inconvenience caused.

The insurer did not accept it had caused Diane stress and inconvenience, however, agreed to pay Diane $1,000 on an ex-gratia basis. Diane did not accept our decision and said she would seek legal advice.


Our insight

Even if it may seem to lead to an unfair result, our role is to assess the particular medical facts against the particular policy wording in determining on a case by case basis whether or not there is cover. We could understand Diane’s disappointment with the outcome and highlighted to the insurer that it may wish to consider amending its standard letters.