Pre-existing or new and distinct?

Time for a cruise

In March 2014 Elizabeth and her husband Elton decided to take a cruise around the Mediterranean. Elizabeth and Elton had been getting on in years and Elton had started to have some health issues and issues with his memory.

Elton went to see his doctor for a check-up for the purposes of seeing whether he’d be able to go on the cruise. Elton’s doctor found no reason Elton would be unable to travel.

Elizabeth and Elton purchased travel insurance with Safe Seas after the doctor’s visit and confirmed their booking. In April, Elizabeth and Elton paid $23,404 for a full package cruise that was to leave in early July.

In early May, Elton woke up one morning and was unable to move. Elizabeth was distraught and called an ambulance. At the hospital, Elton was unresponsive, disengaged and very lethargic. The hospital doctors diagnosed Elton with acute hypoactive delirium, fatigue and reduced mobility.

Elton was stabilised and was transferred to another hospital. Elizabeth cancelled the cruise to look after Elton. After receiving refunds there was a loss of $8,166.30. Elizabeth filed her insurance claim with Safe Seas.

Safe Seas declined Elizabeth’s claim and said that Elton had been suffering cognitive decline over the past couple of years and his condition was pre-existing to the policy and excluded.

Elizabeth and Elton’s doctor disagreed and Elizabeth asked for her claim to be reviewed. Safe Seas completed a detailed review of Elton’s medical history and the circumstances of the claim and upheld its decision to decline.

Elizabeth complained to FSCL.

 

The Complaint

Elizabeth said that Safe Seas had wrongly declined the claim. Elton had been afflicted by a new ailment, delirium, which had worsened his mental and physical condition overnight. Elizabeth said it was not Elton’s general deterioration but the new symptoms of delirium, including loss of mobility, confusion and lethargy that caused them to cancel travel. Elton had not been diagnosed with delirium until admitted to hospital, nor had he suffered any delirium symptoms until 4 May 2014.

Safe Seas said that they considered the claim arose from a gradual decline in Elton’s cognitive and motor skills and there was not a new or acute event.

 

FSCL’s involvement

We investigated and found:

  • Elizabeth and Elton’s travel insurance policy was effective from 17 April 2014.
  • Elizabeth and Elton made their travel arrangements and paid the funds for their travel on 24 April 2014. 
  • Elton had not been afflicted with delirium prior to 4 May 2014. The delirium was a new medical event and not related to any pre-existing medical condition.
  • Elton’s pre-existing medical conditions at the time the Safe Seas travel insurance policy was activated were not the cause of the cancellation. 
  • Safe Seas had incorrectly declined the claim.

 

Outcome

We recommended that Safe Seas pay to Elizabeth and Elton the claim for non-refundable travel expenses. Safe Seas accepted our recommendation and paid $8,166.30 in full and final settlement of Elton and Elizabeth’s complaint.

 

Lesson

You should disclose all known pre-existing medical conditions to your insurer when you apply for travel. If you are concerned about a particular health issue and would like cover, many insurers will cover the condition for an additional fee.

In reviewing your claim, the insurer will apply the policy wording and if it relates to an excluded or non-disclosed pre-existing medical condition, you will likely not be extended cover. When relying on the exclusion, the insurer has to show the pre-existing medical condition has caused or contributed to your loss depending on the specific policy wording.