The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
In a recent case that underscores the importance of understanding insurance policy clauses, a man who cut short his vacation in the United States to be with his terminally ill sister-in-law has been denied an insurance payout.
The ruling, made by the Australian Financial Complaints Authority (AFCA), favored the travel insurer due to the claimant’s lack of coverage for pre-existing medical conditions of relatives.
The situation began when the policyholder purchased travel insurance for a family holiday scheduled to begin on December 12, 2023. Shortly after arriving in the U.S., the man was informed of his sister-in-law's critical health decline due to metastatic colorectal cancer. He returned home to be with her in her final days, later resuming his vacation on December 23.
However, upon claiming for the abrupt change in travel plans, the insurer, AWP Australia, denied the claim. They stated that the policy explicitly excluded coverage for incidents related to pre-existing medical conditions of the insured’s relatives. The sister-in-law’s diagnosis of cancer and a pulmonary embolism had been established for nearly a year prior to the start of the policy coverage.
The case highlights a common oversight among travelers: not accounting for family members' significant medical histories while planning their travels. Even though the policy allowed for early return and resumption of journey benefits, these did not apply as the sister-in-law's health condition predated the travel insurance policy.
The policyholder argued that the policy had not explicitly required him to disclose his sister-in-law’s medical background, which he felt was unfair. He also mentioned experiencing substantial financial hardship due to the rejection of his claim. Nevertheless, AFCA supported the insurer's decision.
In summarizing the decision, the AFCA ombudsman stated, “I acknowledge the complainant was not aware that [his sister-in-law] may fall seriously ill and pass away when he commenced his holiday. However, I am satisfied the exchanged information shows death was caused by her pre-existing medical conditions for the purposes of the policy. In the absence of any other information, I am satisfied the insurer is entitled to deny the claim.”
This resolution accentuates the criticality of reading and comprehending the exclusions present in travel insurance policies. Policyholders should be fully aware of what constitutes a pre-existing condition and how it may impact claim eligibility. The case serves as a cautionary tale for travellers to ensure all potential scenarios are accounted for in their insurance coverage. For further details, you can refer to the ruling as noted by Australian Financial Complaints Authority.
Published:Wednesday, 22nd Jan 2025 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
Small and medium-sized enterprises (SMEs) across Australia are increasingly burdened by soaring insurance premiums, with many facing hikes of 30% or more within a single year. This surge has led some businesses to either reduce their coverage or forgo insurance altogether, exposing them to significant financial risks. - read more
Australian insurtech company Upcover has unveiled a new management liability insurance product designed specifically for small and medium-sized enterprises (SMEs) and sole traders. This offering aims to provide comprehensive protection against a range of risks that business owners may encounter. - read more
In response to the growing prevalence of cyber threats and increasingly stringent regulations, QBE Insurance has announced a strategic initiative to bolster its cyber insurance capabilities. This move aims to provide brokers and their clients with more robust support in navigating the complex landscape of cyber risks. - read more
The Australian insurance industry has reported a net profit after tax of $1.11 billion for the first quarter of 2025, according to the latest data from the Australian Prudential Regulation Authority (APRA). This figure includes contributions of $990 million from insurers and $123 million from reinsurers. The insurance service result, a key measure of underwriting performance, stood at $1.32 billion for the quarter, complemented by investment returns totaling $1.18 billion. - read more
Public liability insurance is a crucial safety net for both businesses and individuals, providing protection against the financial fallout from claims of injury or damage that your business operations might cause to third parties. This type of insurance is designed to cover legal and compensation costs, safeguarding you from unexpected financial burdens. - read more
In the ever-evolving landscape of Australian commerce, business insurance stands as a crucial bulwark, safeguarding enterprises against unforeseen financial perils. Recognizing this, our in-depth exploration begins with an overview of the monumental role business insurance plays for Australian companies, both large and small. It's a cornerstone for risk management, providing business owners with peace of mind as they navigate the intricacies of their industries. - read more
Liability insurance is a type of coverage designed to protect you from claims arising out of injuries or damages to other people or property. For freelancers, who often juggle multiple projects and clients, liability insurance can offer a safety net that reduces financial risk and instability. - read more
Running a small business can be both rewarding and challenging. One of the key challenges is the variety of risks that can arise unexpectedly. These risks can range from financial uncertainties to operational hiccups, each potentially impacting your business's success. Understanding these risks and preparing for them is crucial for the longevity and sustainability of any small enterprise. - read more
Start Here !
Knowledgebase
Underwriting: The process by which an insurer determines the risk of insuring a client and decides the terms of coverage.
