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Big shocks for policy buyers

It pays to read the small print, says Business reporter Kim MacDonald.

WA travellers have had some nasty surprises at the hands of travel insurance policies that fail to cover some seemingly basic holiday mishaps.

A watch stolen from checked-in luggage, a trip cancelled on doctor’s orders and a hospital stay after a friendly game of amateur football are just some of the scenarios that commonly fall outside basic travel insurance policies.

Analysis by [|Travel'''' ] shows many policies have restricted coverage for pre-existing medical conditions, a broad range of physical activities and theft from checked-in luggage.

SRG Corporate Insurance broker Daniel Brockway says it pays to read the fine print, because the difference in what is covered in the range of travel insurance policies is staggering.

“A lot of people think they are fully covered under the credit card, which provides free travel insurance,” he says.

“It’s an old cliche, but it’s true — you get what you pay for, and there are many different levels of coverage.”

Mr Brockway claims it has never before been more important to get insurance policies right.

He says travellers are not only venturing to increasingly remote places to experience extreme sports such as bungee jumping, but the cost of medical treatment abroad has skyrocketed.

Research by PeopleSure shows that average cost of a night in intensive care in an American hospital is $21,500.

Hospitalisation for a bout of gastroenteritis can set you back $4000 in France and $40,000 in the US.

Medical evacuation from the States ranges from $75,000 to $300,000.

Mr Brockway says that when in doubt, travellers should call insurance hotlines to disclose their pre-existing conditions, and find out exactly what is covered under their policy.


PRE-EXISTING CONDITIONS

The pre-existing conditions covered in basic travel policies usually include relatively low-risk and inexpensive health problems such as carpel tunnel and skin conditions.

Sometimes, higher-risk conditions such as asthma and diabetes are also covered in basic policies, provided the conditions has not required medical treatment in the previous year.

But Mr Brockway says more serious pre-existing conditions — such as cancer and heart problems — are often excluded altogether.

Travellers who suffer from these serious problems may have to hunt around for a more comprehensive policy. They may have to pay a premium for the coverage, and provide a fit-for-travel note from their doctor.

Mr Brockway says it is important to declare pre-existing conditions when looking for travel insurance to make sure there are no nasty surprises.

“Imagine someone has a heart condition, goes to America and forgets to take his heart condition medication,” he says.

“Imagine he has a heart attack on the road, crashes the car, ends up in intensive care for six months and causes damage to other vehicles.

“He may have travel insurance, but the claim could be knocked back if it does not cover him for a pre-existing heart condition.

“Without the right cover, the medical bill will turn a nice family holiday into a potential lifetime of debt.”

Our analysis shows one of the more contentious clauses that commonly appears in insurance policies is a refusal to compensate any claim arising from mental illness.

Insurance companies sometimes muddy the waters by not spelling out exactly which mental conditions they exclude from policies, by making a reference in product disclosure statements to any mental condition described in the Diagnostic and Statistical Manual of Mental Disorders, Volume IV, published by the American Psychiatric Association.

Those who have bothered to look up the manual have been surprised to find that it not only includes extreme problems such as personality disorders, schizophrenia and pyromania, but also relatively common illnesses such as depression, anxiety, acute stress disorder that lasts at least two days, and sleeping disorders such as primary insomnia.

A WA woman was subject to the full force of the fine print back in 2012, when she lost the $30,000 she had pre-paid for an African safari.

The woman says she had expected full reimbursement because her QBE travel insurance policy (CGU) had said it offered unlimited insurance on cancellation.

However, the fine print excluded any claims relating to mental illness including depression and anxiety.

This meant her claim was rejected as she and her late husband had been forced to cancel the trip when he was hospitalised for acute depression.

At the time, lawyers for QBE told [|The West Australian ] their decision was legal because it came within the scope of an exception to anti-discrimination legislation, and was based on statistical data that the risk of cancellation among people with depression was high.

But what can you do if you have been excluded from travel insurance on the ground of pre-existing medical condition?

Jenni Ibrahim of West Leederville, who has chronic lung disease, says she chooses to fly without adequate travel insurance.

For many years she had managed to find appropriate cover, but in more recent years has been rejected by multiple insurers who won’t cover chronic lung disorder, even at a premium.

“Your specialist can declare you fit for travel, even if you have to use oxygen in the cabin,” she says.

“But if no insurer will cover you, you are stuck.

“You can always buy a policy, declare your existing condition, and have a policy that covers you for everything else.

“But you still have no cover for the thing you worry about most.”

But Balcatta mother and mental health advocate Melissa Kelly successfully challenged an insurance company that denied travel insurance to her 26-year-old son Patrick for any medical issues relating to his Asperger syndrome.

Patrick was told by the Indian Pacific railway that its insurance provider, SureSave, did not cover anyone with autism spectrum disorder.

Ms Kelly managed to get a policy through an alternative provider, CGU, which covers the medical condition.



CGU deemed Patrick, who was travelling with a support worker and had not made a claim over many trips, as relatively low-risk and charged him only $30 extra.

But, upset at the discrimination, Ms Kelly later filed a complaint against SureSave with the Australian Human Rights Commission on the grounds it contravened the 1992 Disability Discrimination Act.

She says the matter was resolved in Patrick’s favour, with SureSave eventually agreeing to change its policy from automatically excluding people with neurodevelopmental or behavioural conditions in favour of case-by-case analysis.

The insurance company also paid him $500 in compensation, covered the cost of his CGU travel policy and gave $500 to Patrick’s charity of choice.

The AHRC would not comment on the specific case but confirms there are sometimes grounds to challenge insurance companies for discrimination.

“The law provides that a person can make a complaint to the commission if, because of their disability, they have been denied travel insurance or been offered a policy on less favourable terms (such as) a more expensive policy,” a spokeswoman for the commission says.

“The law provides such action by an insurance company would be unlawful discrimination unless the insurance company can demonstrate that the decision is based on actuarial or statistical data that it is reasonable to rely on and is reasonable having regard to the data and other relevant factors.

“Where no actuarial or statistical data is available and cannot reasonably be obtained, the insurance provider can also argue that the action they have taken is not unlawful discrimination because it is reasonable having regarding to other relevant factors.”

SureSave declined to comment on the matter or its policy regarding pre-existing conditions.


[|ACTIVITIES]

Mr Brockway says there is a vast difference in the number and types of activities that incur medical coverage under travel insurance policies.

His review of free travel insurance through Australian bank credit card arrangements revealed most do not cover injuries from a raft of activities, like white-water rafting or boating, water or jet skiing, playing polo and off-piste snow skiing or snowboarding.

In other words, travellers are not covered for many of the activities that are commonly enjoyed on holiday.

“If you are going holiday in New Zealand to enjoy the ski slopes and white-water rafting and all the other things you enjoy on an adventure holiday, you may want to check that you are covered under your travel insurance policy,” he says.



Analysis by [|Travel ] shows some insurance providers are even more restrictive than free credit-card policies.

A travel insurance policy called Kango Joey Cover (Allianz Insurance) may appear to be a comprehensive medical policy because it is exclusively aimed at covering medical bills abroad.

But unless you specifically request to pay an additional premium for sports and activities, you would not be covered for injuries stemming from amateur occasional football, hockey, a cycle tour, mountain biking and horseriding. (The premium would take coverage for two-week holiday in New Zealand from $27.50 to $41.)

This means that if you have an accident while playing amateur football, your medical bills would not be covered.

The same goes for yachting, hockey, go-karting and scuba diving with an instructor.

Mr Brockway says activities such as these are usually covered in the more comprehensive corporate policies, albeit at a higher cost.

But these policies usually restrict coverage to amateur sports people, excluding professional athletes.

And do not be surprised if insurance companies make their own inquiries into your version of events.

“A general rule is that the insurance company probably is probably going to investigate your medical history if you are making a big claim,” he says.


[|CHECKED-IN LUGGAGE AND STOLEN ITEMS:]

It is a little-known fact that many insurance policies — ranging from the free credit-card policies to comprehensive corporate policies — do not provide coverage for items stolen from checked-in luggage.

Retiree Neil Burton, from York, found this out the hard way after a trip on Singapore Airlines in March.

Upon his return to Perth from Singapore he noticed his checked-in baggage had been damaged, and says that when he later unpacked he realised a $600 watch had been stolen.

A frustrating and unsuccessful process to get compensation for his stolen watch ensued.

His insurer AMEX (ACE insurance) was the first to wash its hands of responsibility, referring to a product disclosure statement that excluded “valuables from an unattended motor vehicle or from checked in luggage”.

Analysis of three other product disclosure statements by [|Travel] reveals similar clauses regarding checked-in luggage, indicating the AMEX clause is not exceptional.

Mr Burton claims it is ironic, given his policy would have paid out up to $3000 if his entire bag had gone missing.

It also would have paid him if the watch was stolen from his carry-on luggage, which is covered under the policy.

He says the airline willingly agreed to pay for the repair of his baggage, which was damaged during the theft, and then referred him on to Dnata baggage services to chase compensation for his missing watch.

“I believe that Singapore Airlines admitted liability in so far as they fixed my case,” he says.

“But months later it still has not been resolved.”

An email chain then reveals a sequence of events that is as ridiculous as frustrating.

More than a month after he made the claim, a Dnata representative emailed him with advice to go to the international terminal at Dubai Airport to discuss the matter further.

The next email acknowledged it was impossible for him to discuss the matter in person at Dubai airport, but went on to say their only responsibility was to trace missing bags.

A spokesperson for Singapore Airlines could not find details on the specific matter and declined to comment further.

Mr Brockway says valuables should be stored in carry-on luggage, while checked-in luggage could be cling-wrapped for extra security.

“It would be reasonable for an insurance company to expect travellers take precautions with electronic equipment and expensive personal effects, and this would be reflected in the conditions of most travel policies.”

Travellers should also be aware that is they make a claim for a stolen item — whether from checked-in baggage or during the holiday — they need to prove they reported the theft to police or the authority in charge of the vehicle or aircraft within 24 hours.

A lesser-known but equally important clause in many policies is that any claim for an item that is lost or misplaced must also be made to those authorities within the same timeframe.

So even if the disappearance of you treasured belonging is not the work of a nimble-fingered thief but a forgetful oversight, you still need to make a report.

Furthermore, you will need to provide proof of purchase, such as receipt, for the item you are claiming.

It should be noted that most policies do not pay out for theft from an unattended vehicle.


Travel insurance tips

Make sure you are covered for the region where you are holidaying. The Americas and Africa often incur a premium.

Check your eligibility for making an insurance claim if travelling to areas subject to a travel warning from the Australian Government.

In order to claim on lost or stolen items, you must report the missing item to authorities within 24 hours

Be aware that some policies do not cover accommodation or flights if they are booked outside Australia

Many policies insist policy holders agree not to admit to fault in any circumstances where an insurance claim is being made.

Carry valuables in carry-on luggage as theft from checked-in luggage may not be covered.

Be aware that pre-existing medical conditions have some surprising inclusions, such as pregnancy, depression, anxiety, alcoholism and insomnia.



Travel insurance tips

Make sure you are covered for the region where you are holidaying. The Americas and Africa often incur a premium.

Check your eligibility for making an insurance claim if travelling to areas subject to a travel warning from the Australian Government.

In order to claim on lost or stolen items, you must report the missing item to authorities within 24 hours

Be aware that some policies do not cover accommodation or flights if they are booked outside Australia

Many policies insist policy holders agree not to admit to fault in any circumstances where an insurance claim is being made.

Carry valuables in carry-on luggage as theft from checked-in luggage may not be covered.

Be aware that pre-existing medical conditions have some surprising inclusions, such as pregnancy, depression, anxiety, alcoholism and insomnia.