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Investment Executive | Client, not agent, has to figure out insurance coverage

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A recent decision from the British Columbia Court of Appeal suggests that clients who take out medical insurance for travel need to keep a close eye on the fine print. They cannot rely on their agents to flag key points for them.

Given that many clients would never consider reading these dense and voluminous documents, that could take a lot of effort. But failure to understand the policy could result in massive medical bills from foreign travel.

The plaintiff wife in the case, Turpin v. The Manufacturers Life Insurance Company, had sought medical help for mysterious abdominal pain on Sept. 23, 2007, in Victoria. After a course of antibiotics, she was pain free by Sept. 27, 2007.

The Turpins then prepared for a trip to California in early October, including the purchase of medical travel insurance. But the preparations did not go far enough. Notes the decision: “The agent from whom [Ms. Turpin] purchased [the medical insurance] told her there were limitations or restrictions in the policy, but did not explain them [emphasis added]. The front page of the policy also advised there may be limitations and exclusions to coverage and stated ‘PLEASE READ YOUR POLICY CAREFULLY BEFORE YOU TRAVEL.’ Ms. Turpin did not read the policy.” (The trial decision notes that the policy was sold by the insurers agent “‘off the shelf’ as it were.” The trial decision also notes that, even if she had tried to read the policy, “she would have found it difficult to understand, with its myriad of excluding conditions, variously applicable, or not applicable, to an infinite array of possible risks.”)

While in California, the plaintiff wife suffered abdominal pain. She eventually spent five days in a Newport Beach hospital before returning to Victoria. In December of that year she had an appendectomy in Victoria.

The wife submitted a claim for $27,170.81 to the insurer in October of 2007 and noted that a diagnosis was “not yet made.”

The insurer denied the claim on the basis that the abdominal pain she experienced in California was an “unstable pre-existing condition” and that coverage was therefore excluded. The relevant section of the policy stated that there was no coverage for “pre-existing conditions or related medical conditions which were not stable and controlled during the 90 day period immediately preceding your effective date.”

Continued…

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