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Travel insurance is essential for Australians venturing abroad or across Australia, offering protection against a range of potential medical emergencies.

However, disputes can arise when insurers deny claims based on medical grounds. These disputes often revolve around ambiguous policy terms, differing interpretations of medical necessity, and “pre-existing” conditions.

Here, we examine a case study, highlighting whether a pre-existing medical condition is excluded under a travel insurance policy, in circumstances where the medical condition was known to the traveller in board terms at the time of policy purchase, however the severity of that condition was not known.

Background: On 13 June 2022, a traveller purchased a tour package for a trip between 27 May 2023 to 14 June 2023 (the “trip”). On 2 March 2023, she purchased a travel insurance policy covering the trip. She cancelled the trip on 18 May 2023, due to the sudden deterioration of osteoarthritis in her right hip (which was asymptomatic at the time of policy purchase), requiring a total right hip replacement. On 7 June 2023, she claimed on her policy for non-refundable costs associated with the cancellation of her trip.

The insurer disputed the claim, alleging:

1. the cause was a pre-existing medical condition which is excluded under the policy. In that regard, the policy excludes “a medical condition that includes any diagnosed or undiagnosed condition where [the traveller is] awaiting investigation, referral, treatment or results”; and
2. the traveller cancelled her trip due to circumstances that manifested themselves between the date the trip was booked and the policy purchase (i.e. between 13 June 2022 and 2 March 2023).

Legal Outcome: The traveller lodged a dispute through the Australian Financial Complaints Authority (AFCA). She relied upon reports from her treating doctors, which were dated after the travel insurance policy was purchased.

1. The cause was not a pre-existing medical condition excluded under the policy.

AFCA accepted that the traveller had osteoarthritis of the hip at the time of the policy purchase, and that she was aware she may require a total hip replacement at some unspecified and unknown stage in the future. However, AFCA determined that the traveller did not know that such treatment was required or anticipated as imminent at the time she booked the trip. She was not therefore “awaiting investigation, referral, treatment or results”, as required by the policy definition of “pre-existing medical condition”.

2. The traveller did not cancel her trip due to circumstances which manifested themselves between the date the trip was booked and the policy purchase.

The medical evidence showed the right hip osteoarthritis was diagnosed in 2018 – four years before she booked the trip.

While the clinical records showed discussions about a potential future right hip replacement surgery between the date the trip was booked and the policy purchase, AFCA determined this appeared to be continued care of a condition that had been known about for years, in the context of treatment sought for an unrelated medical condition.

Key Takeaway: This case highlight’s the importance of obtaining, retaining and relying upon medical evidence (reports and clinical notes), including contemporaneous and detailed medical histories.

This article was published on 7 November by Carroll & O’Dea Lawyers and is based on the relevant state of the law (legislation, regulations and case law) at that date for the jurisdiction in which it is published. Please note this article does not constitute legal advice. If you ever need legal advice or want to discuss a legal problem, please contact us to see if we can help. You can reach us on 1800 059 278 or via the Contact us page on our website.