On 31 January Monty went to see his doctor, suffering from exhaustion and anxiety.
On 19 February Monty went to see his doctor again due to exhaustion, both physical and emotional. The exhaustion was preventing Monty from performing simple tasks. During the appointment, the doctor discussed Monty’s history of low haemoglobin and anaemia. Monty’s doctor planned to refer Monty to a haematologist because of his anaemia.
On 22 February Monty purchased a travel insurance policy for his trip leaving on 1 March.
On 28 February Monty saw his doctor for the third time and explained that he was due to leave for Rarotonga the following day. He stated that he was ‘too sick’ to travel and Monty’s doctor confirmed this in a letter.
Monty later claimed insurance for his cancellation costs and sent the insurer his medical history. Monty’s insurer declined his claim.
Why did the insurance company decline the claim?
The insurer relied on an exclusion clause in its policy saying it would not pay under any circumstances if the claim arose from a pre-existing medical condition.
‘Pre-existing medical condition’ was defined in the policy as:
An ongoing medical condition which Monty was aware of OR
A medical condition that is currently being or has been investigated.
The insurer said that Monty’s iron / anaemia issues met the definition of a pre-existing medical condition.
When the insurer denied his claim, Monty complained to FSCL. He did not think his medical history showed a pre-existing medical condition.
Monty believed the reasons he saw his doctor on 31 January and 19 February were unrelated to the reasons he had to cancel his trip on 28 February. Monty did not consider his low iron levels to be a pre-existing medical condition because he has never had to take medication, or miss work because of the condition.
Furthermore, Monty believed the insurer did not do enough to inquire into his pre-existing medical conditions at the time he purchased the policy. Monty said when he applied for the insurance (online), the information required was very basic and no enquiries were made into whether he had pre-existing medical conditions, or, whether any medical issues he had would affect how appropriate his insurance was.
Even though Monty accepted he had some history of low iron levels, this was not something he thought the doctor had linked to his illness before he was due to travel.
The insurer argued it gave Monty the full terms and conditions of the policy on the day he purchased it (22 February). In addition to this, the insurer stated that the policy contained within it the pre-existing medical condition clause and definition. Given that there was a 14 day ‘cooling off’ period where customers are entitled to cancel their policy and receive a full premium refund, the insurer believed it was Monty’s responsibility to familiarise himself with the terms and discontinue the policy if he was dissatisfied. Furthermore, Monty had written on his claim form that the reason he was not travelling was ‘low iron levels.’
We agreed with the insurer and suggested Monty discontinue his complaint (which he did).
It is the insured’s duty to ensure they read and understand their insurance policy. Because Monty had been to the doctor a number of times in the month preceding his travel for ‘low iron levels’ it is clear that they were an ‘ongoing medical condition which Monty was aware of.’ Because there were plans for Monty to see a haematologist, it was likely that his anaemia/ low iron levels could also be classified as a medical condition that is currently being investigated.
Key insight for consumers
It is important to realise the definition of pre-existing medical conditions is likely to vary substantially from insurer to insurer. Though the term may sound like it would require clinical diagnosis, generally the clause definition is so broad as to include any reason for which the insured has visited the doctor.
It is also important to remember not only to read the policy terms and conditions, but also the policy definitions and to disclose all health issues.