Will a travel insurance policy cover my prosthetic equipment?

Before holidaying overseas, we're told – almost warned – to take out travel insurance to protect (as best we can, at least in financial terms) our belongings and our health.

Taking out a travel insurance policy isn’t hard and can usually be done at the same time you purchase airfares through a travel agent or online. Most policies aren’t that expensive either. For a few hundred dollars you can usually obtain a policy that will cover lost or stolen luggage, cancelled flights and other unexpected holiday costs. You can expect these same policies to cover overseas hospital and medical expenses and even cover you for loss of income for a period and, in the worst-case scenario, make a payment to your family if you die.

It all sounds like the perfect way to have peace of mind as you head off on a fun-filled overseas holiday… but, what if it’s not that simple? Unfortunately, like most things insurance-related, the glossy front page of the policy or the poster in the travel agency often isn’t a true reflection of how the insurance company will consider any claim you might have to make. Is it do with the fine print? Unfortunately, the answer is "yes it is!"

Most travel insurance policies won’t cover health conditions you have or have had, before you take out a policy.

This can depend on when your health condition arose and what type of condition you have. Even conditions that are well-treated, responding well to medication and in the opinion of your treating doctor or specialist, are 'under control,' may still not be covered, as more often than not pre-existing health conditions are excluded. Sometimes, even if the policy doesn’t specifically mention your health condition, it will contain a “catchall” clause excluding health problems you were aware of or should reasonably have been aware of before you purchased the policy.

All is not lost, however. Even if the insurer won’t cover your health condition, that doesn’t mean you can’t still get cover for non-medical things, like protection for your luggage or financial protection should your holiday be in some way disrupted. (Depending, of course, on the cause of the disruption… disruption due to a decision of a government or its military generally isn't covered!)

The reality is, when you buy travel insurance you receive a policy document/Product Disclosure Statement that is filled with as many reasons for an insurance company not to pay out a claim as there might be to pay out a claim. There is some good news though: you can question any decision an insurance company makes and try to get their decision overturned. You must do it within 6 years from the date you are told about their decision. To dispute an insurance company’s decision, the first thing to do is get the decision in writing. This helps to understand the part of the policy the insurance company is relying upon to reject your claim. You can then write to them asking for their decision to be changed. To do this you need to ask for your letter to be considered under the insurer’s internal review procedure. This is important!

In your letter, set out why the insurer’s decision is wrong and if you have any documents to support your claim, provide them (provide copies only, never provide originals). It is important to keep all of your dealings with the insurance company in writing, whether by email or traditional letter. Discussions had over the phone can be interpreted differently by different people and it creates confusion down the track. Stay away from the phone where possible. Also, if you can, keep a mini-file of your dealings. Keep copies of all letters sent and received and make notes of any conversations you have (if you need to have conversations – see above regarding using the phone).

Once the insurer receives your letter, it has 45 days to review and reconsider its original decision under its internal review procedure. If the decision stays the same (if the insurer again rejects your claim), there are still steps you can take to challenge the decision that require you to appear in court and undergo days of questioning in a witness box by a Kings Counsel! The next step is to lodge your matter with the Financial Ombudsman Service (FOS). The FOS is an independent umpire who will consider the arguments of both you and the insurance company and then determine who it thinks is right. The FOS is free. Lodging your matter with the FOS can be done quite easily online or if you phone them they will send you forms to fill in to start the dispute process. The FOS’s website is: afca.org.au and their phone number is 1800 367 287. It can take several months before the FOS provides its decision, sometimes longer. If the FOS decides the matter in your favour, the insurance company is bound by the decision. If the FOS agrees with the insurance company you do not have to accept the decision and you can still take the matter further.

The FOS doesn’t always get it right (it is made up of humans after all!) Action can also be taken against an insurance company if a decision is made not to provide you with insurance because of a disability unless the insurance company can provide evidence that justifies the discrimination. This evidence needs to show, whether from previous claims or actuarial or statistical data, that providing insurance to you because of your disability or ill-health would be an unreasonable risk. Otherwise, it is illegal in Australia to discriminate against somebody because of a disability and you are well within your rights to do something about it and you should do something about it. If you believe the decision of an insurance company is discriminatory you can ask for the decision to be reviewed by lodging the matter with the Australian Human Rights Commission. You can contact the Commission through their website www.humanrights.gov.au or by phoning them on (02) 9284 9600.

The immediate difficulty with disputing a decision made by an insurance company on the grounds of discrimination is one of timing. Not many people (realistically, probably none at all) apply for a travel insurance policy many months out from their overseas trip to allow for the need to pursue a complaint with the Australian Human Rights Commission! For this reason, it may be that travel insurance companies are not held to account for some of the decisions they make not to provide insurance to people who have health problems or disabilities even though those problems are stable and are no more of a risk than a person without the health problem or disability.

But what about insuring my prosthesis?

Limbs 4 Life are regularly contacted by amputees who want to know the following:

• Do I need to insure my prosthesis?
• Which companies will insure my prosthesis?
• What do I do if something happens to my prosthesis?

If you plan on travelling around Australia, you may not require any additional cover. Most funding bodies agree that if you take reasonable care to prevent damage, loss or theft of your device then they will consider replacing it for you. If you are travelling overseas and you want to take out cover for your prosthesis there are a couple of things to consider. Insurance cover for your prosthesis may be included as part of your house and contents insurance. You might find that you get a shock when you receive the bill. If your device is valued between 10 – 15K then it may cost you close to that amount for cover – is it worth it? Well, that decision is yours.

The best recommendation that we can give you, is to look after your device. Don’t leave it laying around beside a pool or on a beach unless you have someone who can look after it for you.

This article was written by Michael Bates,
Principal Lawyer from Leonard And Welch -
Superannuation & Insurance Lawyers.