Hazards on the green
In February, Michael booked the last of his travel and accommodation arrangements for his trip to Europe. Michael was going to leave in early May and visit 7 countries. After he had booked and paid, Michael asked about travel insurance with Excelsior Expeditions (Excelsior). Excelsior explained its policies and asked Michael if he had any pre-existing medical conditions (PEMCs). Michael disclosed he had had a heart attack 2 years ago but was otherwise in good health. Excelsior sent Michael information about its policies and premiums. Michael did not choose and pay for a policy straight away but knew he would get around to it.
On 2 March Michael was helping to core the greens at his local golf club and he scratched his hand. By 5 March, the scratch had developed into a cellulitis infection and Michael needed to be hospitalised and treated with intravenous antibiotics. Michael was in hospital for a week and discharged on 12 March and had to complete a course of oral antibiotics and have follow up care. On 26 March, Michael chose his travel insurance policy and paid the premium. Michael did not declare his cellulitis infection to Excelsior.
On 2 April Michael’s cellulitis infection had not cleared up and Michael went back to hospital. The infection was worse than Michael thought and he had to have some of the infected tissue removed from his hand and have a skin graft. Michael was discharged from hospital on 9 April 2015 and was told that he should not travel for another 6 to 8 weeks as he would require ongoing care. Michael cancelled his holiday and made a claim to Excelsior for his travel costs.
Excelsior accepted Michael had cancelled his trip due to an unforeseeable circumstance beyond his control. However, Excelsior declined to cover Michael’s claim for cancellation expenses because the policy had an exclusion to cover for claims relating to PEMC’s. Excelsior said Michael’s cellulitis infection was an existing illness which he was aware of and had sought treatment for in the last 6 months, prior to buying his travel insurance policy on 26 March. Excelsior said Michael’s cellulitis was a PEMC and there was no cover under his policy.
Michael did not think it was fair for Excelsior to decline his claim and complained to FSCL.
We investigated the complaint and found:
- The effective date for this insurance policy was the date on which the premium was paid. Until the premium was paid there was no insurance contract and no cover.
- Michael knew he had to disclose all PEMCs because he had been told by Excelsior and he had disclosed his heart condition already.
- The obligation to disclose anything that may increase the risk for your insurer is an ongoing obligation and Michael should have disclosed his hospitalisation with cellulitis and asked for it to be covered before he purchased his policy.
- Excelsior had reasonably applied the policy wording.
We could not uphold Michael’s complaint. Michael was disappointed but he accepted the policy was clear and he should have disclosed his cellulitis to Excelsior if he wanted it to be covered under the policy. Michael was also disappointed that he had not paid the premium and put travel insurance in place immediately he paid for the holiday. Michael discontinued his complaint.
Most travel insurance policies do not come into effect until the premium is paid. Travel insurance policies have different definitions for PEMCs, however generally these include any illness or defect which you were aware of before cover commenced. If a PEMC has not been disclosed to your insurer it will not be covered. Your insurer may agree to cover a disclosed PEMC and if it does so it may charge a higher premium. It’s also wise to finalise and pay for travel insurance before, or as soon as soon as possible after, paying for your booked travel.