Peter’s pre-existing medical condition
Peter and his wife Mary booked a European holiday in February 2013 and took out travel insurance. Peter and Mary were due to depart New Zealand on 31 May 2013.
Peter had been diagnosed with Chronic Obstructive Pulmonary Disease (“COPD”) some years earlier. This meant that at the time the travel insurance policy was taken out in February 2013, COPD was a ‘pre-existing medical condition’, which Peter had not disclosed to the insurance company.
COPD is a disease which generally affects one’s ability to breathe, and carry out certain activities. Peter spoke to a friend who suggested Peter attend a programme at his local hospital which may improve his breathing. Peter was not unwell at the time and asked his GP to refer him to the programme simply to improve his breathing.
As part of the programme, the hospital doctors carried out an X-Ray on Peter and found an anomaly. He was prescribed antibiotics but did not feel unwell. Peter had a follow up X-Ray on 28 May 2013 and based on the results of this X-Ray was advised by the specialist not to travel as planned on 31 May 2013. This was so that further tests could be done, as there was a suspicion of cancer.
Peter and Mary cancelled the trip. Their cancellation costs were $11,200.
Peter submitted a claim to the insurance company for the cancellation costs.
Peter was less than satisfied with the time it took for the insurance company to process his claim. He was also annoyed that the insurance company did not come back to him within the time frames it said it would.
The insurance company reviewed Peter’s claim several times and said that the cause of cancellation was Peter’s COPD which was a pre-existing medical condition. Payment of cancellation costs incurred as a result of a pre-existing medical condition was excluded under the insurance policy.
However, Peter had provided the insurance company with information from his GP and the specialist at the hospital. The specialist stated that Peter’s cancellation of travel plans was not related to his stable COPD, but was because of a radiological abnormality found on a routine X-Ray.
After being contacted by FSCL for a report on Peter’s claim the insurance company’s medical team reviewed the information provided by the specialist once again. The medical team concluded that the actual cause (or ‘proximate cause’), of cancellation was suspicion of cancer, and not COPD.
The insurance company apologised for the delay in resolving the claim, paid the claim in full, and waived the $200 excess payment as compensation for inconvenience.