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A new mindset More than a year after a landmark legal decision, two major travel insurers have removed blanket exclusions for mental illness By Andy Swales

WHEN ELLA INGRAM TOOK HER TRAVEL insurer to the Victorian Civil and Administrative Tribunal (VCAT) in 2015, she cast light on an issue with which the industry is still grappling today. In February last year the tribunal ruled QBE breached the Equal Opportunity Act when it rejected Ms Ingram’s claim for a school trip to New York that she cancelled due to depression. Ms Ingram did not have the condition when she bought her travel insurance policy, but her claim fell foul of a blanket exclusion on mental health conditions. The tribunal decided QBE had failed to show the exclusion was based on reasonable data, or that it would have suffered unjustifiable hardship without it. Ms Ingram was awarded $4292 to cover economic losses and a further $15,000 for hurt and humiliation. Soon after, an industry roundtable on the matter concluded more data was needed for insurers to adequately underwrite travel policies that cover mental illness, although CGU and Bupa – both underwritten by IAG – already offered cover for such conditions. In March this year the industry received another nudge, this time through a Financial Ombudsman Service determination that an unnamed “financial service provider” should pay a traveller’s claim after he suffered a manic episode in Canada in March 2015, incurring cancellation costs. The traveller received his first diagnosis for a bipolar disorder while on the trip. The service determined the insurer’s “general exclusion for all claims arising from mental illness” was contrary to the Disability Discrimination Act, and the insurer had not “established an unjustifiable hardship” under the Act, nor “established that the discrimination is lawful under the exemptions within” the Act. The insurer was ordered to pay more than $10,000. 66

Now, two major travel insurers, including QBE, have acted. In early July both Ms Ingram’s former insurer and Zurich-owned Cover-More announced the removal of blanket mental health exclusions from travel policies, allowing claims for first diagnoses delivered after a policy is bought. “We have listened to our customers and are making changes that will get us closer to where the community expects us to be,” a QBE spokesman told Insurance News at the time, while Cover-More Chief Executive Mike Emmett hailed it as a “significant first step for Cover-More and Zurich”, noting it is “something the travel insurance industry, including us, has neglected for too long”. The Insurance Council of Australia (ICA) has welcomed the move and expects “further improvements in coverage” as more data becomes available about mental illness-related claims. Stephen Carbone, Research and Evaluation Leader with mental health advocate Beyondblue, calls it a “step in the right direction”. “It’s great that the insurance companies and industry have taken on board what consumers and advocacy groups like ourselves have been saying: that those products were unfair and discriminatory. The Ella Ingram-QBE case demonstrated that in a legal sense, so it’s good they’ve got on board and made those changes,” he told Insurance News soon after the announcement. However, he flagged “room for improvement” on the matter of pre-existing conditions – mental health issues diagnosed before a policy is bought. “I guess it’s understandable to some degree that pre-existing conditions might not be covered, but they should be dealt with as would any other preexisting condition: if you’re willing to pay an insuranceNEWS

August/September 2017

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