In late 2015, Pavati was diagnosed with varicose veins. In 2016 Pavati discussed surgery with her surgeon. However, the surgery was not urgent, Pavati’s condition was not deteriorating, and she was not in any pain. Pavati did not have the surgery.
In early January 2017, Pavati and her husband Rohan booked a trip to India for later that month. A few days before travelling, Pavati found out she was pregnant. Pavati and Rohan did not discuss with their GP any impact that Pavati’s varicose veins and the travel may have on her pregnancy.
While in India, Pavati’s mother suggested Pavati see a doctor. Pavati then saw a surgeon who said Pavati should have surgery sooner rather than later, because there was an increased risk of complications later in her pregnancy.
Pavati underwent surgery, but the recovery time meant she and Rohan were unable to return to New Zealand on their pre-booked flights. It cost $2,000 for the surgery, and there were flight change costs of $1,300. The insurer declined their claim for these costs.
The insurer declined the claim because it said its policy’s pre-existing medical condition (PEMC) exclusion clause applied. The insurer said that the claim was caused by Pavati’s pre-existing vein condition. The specific exclusion wording was met, because Pavati and Rohan were aware of her PEMC six months prior to her travelling.
In addition, the insurer said that the policy’s ‘pregnancy exclusion’ also applied to exclude the claim. The exclusion said it would not pay any claim arising from pregnancy, unless there were ‘unexpected medical complications or emergencies’ in the first 28 weeks of pregnancy.
Dispute
Rohan said it was Pavati’s pregnancy in conjunction with her having the vein condition, which caused her to have the surgery. Rohan said the policy did not specifically exclude claims caused by a PEMC in conjunction with pregnancy, so the claim should be paid. The insurer’s response was that although Pavati’s pregnancy may have influenced the need to have the surgery at the time she did, it was ultimately surgery for a PEMC. Rohan then complained to FSCL.
Review
The PEMC exclusion clause
It was clear that Pavati’s vein condition was a PEMC, because she and Rohan were aware of it in the six months prior to travelling. The general principle is that a claim can be excluded if the ‘proximate’ or ‘dominant’ cause of the claim is the event excluded in the exclusion clause. If the claim was for a PEMC, and the exclusion clause says claims for a PEMC are excluded, then the exclusion clause applies. However, Rohan argued that it was because Pavati had the PEMC and that she was pregnant, that meant she needed surgery.
If we accepted Rohan’s argument, the circumstances of the claim meant that there were ‘concurrent’ proximate causes. There were two events or circumstances (Pavati’s PEMC and her pregnancy), each of which could not, without the operation of the other, have caused the loss.
Where there are concurrent proximate causes, if one of the proximate causes of a loss is excluded, there can be no cover. One of the concurrent causes of the surgery was Pavati’s PEMC, and claims arising from a PEMC were excluded. This meant there was no cover.
The pregnancy exclusion clause
We also said the insurer could rely on the pregnancy exclusion. The Indian surgeon said it was best for Pavati to have the surgery. However without evidence that it was medically necessary to have the surgery immediately, or that travel back to New Zealand put Pavati or the baby at risk, there was no evidence that the surgery needed to occur in India because of an ‘unexpected medical complication or emergency’.
Outcome
We said Rohan’s complaint should be discontinued. Although this was not the outcome Rohan was hoping for, he accepted our decision and thanked us for taking the time to investigate his complaint.
Key insights
All insurance claims, and insurance policy clauses, are slightly different. In cases like Pavati and Rohan’s, FSCL carries out a full analysis of each of the relevant policy clauses, and then applies the facts or the circumstances of the claim, to reach a decision.
