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.
Over the past five years, Australian homeowners have experienced a significant 51% increase in home insurance premiums. This surge has placed a considerable financial burden on property owners nationwide, with Darwin residents facing the highest costs. - read more
Recent developments in the global financial markets have sparked discussions about potential benefits for Australian insurance policyholders. A significant sell-off in the insurance sector on Wall Street has led analysts to speculate that Australian insurance premiums could see a reduction in the near future. - read more
As the effects of climate change become increasingly evident, Australian homeowners are facing a surge in home insurance premiums. The rising frequency and severity of natural disasters, such as floods, bushfires, and storms, have significantly impacted the insurance landscape, leading to higher costs for property owners. - read more
The Insurance Council of Australia (ICA) has recently released a white paper highlighting the urgent need for reforms to state and territory civil liability laws, which have remained largely unchanged for nearly 25 years. These outdated laws are contributing to significant increases in public liability insurance premiums, affecting a wide range of businesses across the nation. - read more
Welcome to the complex world of running a small business in Australia where navigating through liability risks is as crucial as managing daily operations. This article is crafted to illuminate why every Australian small business needs liability coverage — a shield to protect against potential financial catastrophes. - read more
In the bustling world of small businesses, the phrase 'expect the unexpected' captures the essence of entrepreneurship. While you can plan for success, unforeseen risks are always lurking around the corner. That's where the importance of insurance comes into play. It acts as a safeguard, protecting the lifeblood of your business against potential perils. - read more
In today's ever-evolving business landscape, the significance of environmental sustainability and legal accountability is increasingly paramount. Australian enterprises, in particular, are encountering a growing need to understand and manage environmental liability. This reality not only influences corporate image but also carries substantial financial and legal ramifications. - read more
Welcome to our comprehensive guide on liability risks for small businesses in Australia. The world of business is fraught with challenges, and one often overlooked aspect is the array of potential liabilities that can stifle growth or even lead to catastrophic financial loss. It's crucial for small business owners to grasp the critical role that insurance plays in the protection and longevity of their ventures. - read more
Start Here !
Knowledgebase
Disability Insurance: A type of insurance protection that pays a portion of a person's income lost due to a total or partial disablement arising from either an accident or a sickness.
