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Undiagnosed pre-existing medical condition

Paulo travelled overseas often and, even as he was recovering from an illness, he booked an overseas trip. When arranging travel insurance, Paulo disclosed his recent hospital admission to his insurer. The insurer agreed to cover the pre-existing medical condition, but the additional premium was quite high, so Paulo decided to take the risk and not purchase the additional cover.

A couple of months later, Paulo arranged another trip and purchased another policy to cover the travel. On this occasion Paulo did not disclose his on-going medical condition. The doctors had recently prescribed steroids for Paulo to treat an inflammation but were unable to give Paulo a definite diagnosis

Over the following months, Paulo’s health fluctuated, with new symptoms appearing and other symptoms resolving. Paulo continued to consult medical specialists about the cause of his illness, but a definite diagnosis was elusive. When the symptoms of the original illness flared up again, Paulo decided he had no option but to cancel the second trip.

A month or so later the medical specialists diagnosed Paulo’s illness as a rare disease.

Paulo submitted an insurance claim for the lost travel and accommodation expenses for the second trip. When the insurer declined the claim, relying on the exclusion in the policy for a pre-existing medical condition, Paulo complained to FSCL.



Paulo said that at the time he booked the trip he did not know he had the disease and believed that the medical condition that had caused his earlier hospitalisation had resolved itself.

Paulo’s insurer replied that it did not matter that Paulo did not have a diagnosis for the symptoms that had caused him to be unwell. The insurer’s response was slightly confused, referring to a phrase that was in another part of the policy, but ultimately the insurer said that Paulo’s claim fell within the policy exclusion for a pre-existing medical condition because he knew he had an existing or recurring illness and he had a medical condition that was under investigation.



We agreed the insurer was entitled to decline the claim on the grounds that the trip was cancelled due to a pre-existing medical condition. Although Paulo did not have a diagnosis for the illness when he booked the tickets, he knew he was unwell, he had ongoing hospital appointments and was on medication. We were satisfied that it was a reoccurrence of the condition experienced before purchasing the policy that caused Paulo to cancel the trip.

However, we could see that Paulo was inconvenienced by the insurer’s original error in referring to the wrong part of the policy. As a result, the claim was drawn out for longer than it needed to be.



We issued a decision recommending that the insurer pay Paulo $2,000 as compensation for the inconvenience caused during the claims process and that Paulo discontinue his complaint about the declined claim. Paulo did not accept our view and indicated he would pursue the claim through the courts.


Insights for consumers

Claims declined under a pre-existing medical condition exclusion are probably one of the most difficult, and frequent, complaints arising in the travel insurance context. The policy definition of a pre-existing medical condition does not usually require a firm diagnosis to have been made. If you know that you have a problem with your health, or are undergoing medical tests, you should tell your insurer. You may fall within the insurer’s automatic coverage extension or you may be able to pay an additional premium to be covered for your specific medical condition. Even if your insurer declines to cover that condition you will at least know where you stand.