How much information does an insurer need?

In August Mana and Luke booked an overseas holiday for the following April. At the same time, they arranged travel insurance.

In early January Mana started coughing up a significant amount of blood and Luke took her to hospital. The discharge summary showed a diagnosis of suspected lung cancer and Mana was booked in to see a specialist in late January. The specialist confirmed Mana’s worst fears, it was cancer, and the treatment would mean Mana and Luke had to cancel the April trip.

Mana lodged a claim under her travel insurance policy, but the insurer came back asking for more information. The discharge summary showed that Mana had been coughing blood for the past year and had undergone some exploratory scans. The results of the scans were not clear from the discharge summary. The insurer said they needed more information about Mana’s medical history relating to concerns about her lungs.

Mana said she had provided a letter from the specialist confirming that cancer was diagnosed in January, well after Mana had booked her trip. Mana did not see that her medical history was relevant. The insurer said that they could not take Mana’s claim any further without more information from her doctor. Mana disagreed and referred her complaint to FSCL.

 

Dispute

The insurer said that the information available suggested Mana had had concerns about her lungs for some time. If Mana had signs or symptoms of a pre-existing medical condition before she purchased the policy the insurer said they were entitled to decline the claim. Without information about her medical history, the insurer said they could not take Mana’s claim any further.

Mana maintained that the insurer was invading her privacy. She had provided a statement from her specialist confirming the cancer diagnosis in January, well after the trip was booked in August. Mana said that if she had known she had cancer she would never have booked the trip.

 

Review

We accepted Mana’s doctor’s advice that she did not know she had cancer at the time she booked the trip, but it seemed that Mana did know that she might have a problem with her lungs. She had been coughing up blood for the past year and had been to the doctor about this problem.

We explained to Mana that, under the policy, the insurer was entitled to decline a claim if she had a pre-existing medical condition before purchasing the policy. The policy definition of a pre-existing medical condition included signs or symptoms that Mana was aware of. This meant that, even though Mana was not diagnosed with lung cancer until well after she bought the policy, because she had known she had a problem with her lungs for some time, the insurer might be entitled to decline the claim.

The policy also obliged Mana to give the insurer the information they need to assess the claim. If Mana did not co-operate, the insurer were able to decline the claim.

We encouraged Mana to either get her medical history about her lung condition, or authorise the insurer to contact her doctor.

 

Resolution

Mana replied that she had asked for her medical history from her doctor but did not know how long it would take for her doctor to provide the information. We were pleased that Mana had taken this step. Once Mana’s insurer has the information, they will be able to assess her claim. As the timeframe for the whole process was uncertain, we closed our file on the understanding that if Mana had any future problems with the claim, she could come back to us for help.

 

Insights for consumers

Even if you don’t have a definite diagnosis of an illness, if you have signs or symptoms that you might have a problem, most insurance policies will exclude cover on the grounds of a ‘pre-existing medical condition’. Withholding information that might prejudice your claim will only delay the process or cause your insurer to decline the claim anyway. We encourage you to give your insurer all the information you have. If you disagree with your insurer’s decision, you can always refer your complaint to us for a second opinion.

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