travelling again? travel insurance disputes

case studies
– travel insurance disputes

29/1
curtailment claim – firm rejects on basis of policy’s general exclusion clause about claims arising directly or indirectly from alcohol

Mrs D had to curtail her holiday and fly home when she got news that her father had been unexpectedly admitted to hospital. He was suffering from liver disease – the result of years of alcohol abuse.

She put in a claim under her travel policy for the cost of return flights and unused accommodation. However, the firm rejected her claim on the basis of the following general exclusion clause:

‘[We will not pay for] claims arising from the influence of intoxicating liquor or of a drug or drugs unless prescribed by a registered medical practitioner.’

The firm said this clause excluded all alcohol-related claims, however they were caused. It said it took the view that it would be unreasonable to expect insurers to cover any claims arising directly or indirectly from the effect of alcohol or drugs, whether their use was long- or short-term.

Dissatisfied with this, Mrs D brought her complaint to us. She said it was unfair of the firm to apply the exclusion clause in this case, since her father had not been drinking (and was not drunk) when he was admitted to hospital.

complaint upheld
We did not think there was anything inherently unreasonable or unfair about the exclusion clause. But we decided that the firm had been unfair to apply it in these particular circumstances.

The clause was intended to remove cover where a named individual, covered by the policy, bore some culpability for the loss or damage for which they were claiming. We interpreted the phrase ‘influence of intoxicating liquor’ as indicating a state of drunkenness and/or lack of control over one’s actions. It was designed to exclude claims that arose from the insured person being drunk, not from the mere consumption of alcohol.

It appeared that the firm had only cited this clause because its policy made no adequate provision for excluding claims that arose from a pre-existing medical condition (which is what had really led to the curtailment in this case).

We considered that if the firm’s interpretation of the clause in question were upheld, the exclusion would be unreasonably wide and would exclude all sorts of situations for which most people would expect to
be covered. For example, it would exclude a claim where a drunken driver injured a holidaymaker.

We concluded that the firm could not have intended to exclude claims where policyholders were merely innocent victims of chance events beyond their control. So it should not apply the exclusion clause in cases such as this, where claims arose because individuals other than the insured person were ‘under the influence of intoxicating liquor’.

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29/2
cancellation claim – policyholder’s father-in-law committed suicide – whether claim should be excluded

Mr G cancelled his holiday just a week before it was due to begin, when his father-in-law committed suicide. The firm rejected his claim for the cost of the holiday. It said that the policy contained a general exclusion clause relating to claims that arose from suicide or attempted suicide.

Unhappy with the firm’s decision, Mr G came to us.

complaint upheld
We thought the firm had behaved unfairly in applying the exclusion clause in these circumstances. Mr G’s father-in-law was not one of the named individuals covered by the policy and his suicide was an unexpected event beyond Mr G’s control.

In our view, it was unreasonable of the firm to interpret the exclusion clause as applying to uninsured individuals, including those whose death or serious illness might give rise to a legitimate claim, such as close relatives, business associates, travelling companions, etc.

We were also satisfied that the suicide was a wholly unexpected event so far as Mr G was concerned, and that his late father-in-law had not been suffering from any pre-existing condition. The firm agreed to pay the claim.

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29/3
medical emergency and repatriation – firm rejected claim – exclusion clause related to alcohol – medical evidence indicated history of alcohol abuse and causal link with claim

Mr T had to be repatriated to the UK after he collapsed and was taken to hospital as an emergency case while he was on holiday in Tenerife.

The firm rejected his claim for medical and associated expenses. It cited an exclusion clause in the policy that said it would not meet ‘any claim resulting from being under the influence of or in connection with the use of alcohol or drugs’.

Mr T said the illness had not been caused by alcohol or drugs but by a prawn curry he had eaten. He said he had suffered a severe stomach upset and breathing difficulties before finally collapsing.

complaint rejected
The medical evidence from the doctors who had treated Mr T in Tenerife indicated that his illness had been caused by his severe and chronic alcoholism, and by the fact that he had been bingeing on whisky for five days while on holiday. This had led to acute alcoholic pancreatitis. We were satisfied that there was a direct causal link between Mr T’s abuse of alcohol and his claim. We rejected his complaint.

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29/4
accidental bodily injury claim – whether deep vein thrombosis constituted ‘bodily injury’ under the terms of a travel policy

Mrs W’s husband collapsed and died shortly after their plane arrived at Heathrow airport, on their return from a trip to Australia. The cause of death was determined as ‘deep vein thrombosis’ (DVT).

Mrs W made a claim under her travel policy, which included cover for ‘Accidental Bodily Injury’. The firm rejected the claim on the basis that Mr W’s death had been ‘caused by a naturally occurring condition and was not accidental’. The policy stated that bodily injury ‘does not include sickness and disease unless resulting from a mishap, pregnancy or childbirth or other naturally occurring condition’.

Mrs W insisted that her late husband had been in good health before the trip. She said his death must therefore have been caused by external factors, such as the cramped conditions on the aircraft.

complaint rejected
We acknowledged that, despite the medical debate that continues to cloud this issue, there is widely thought to be a link between long-haul air travel in cramped conditions and some instances of DVT. But many people who have not flown recently, or who have flown in business or first class, where the conditions are less cramped, also suffer DVT. And each year large numbers of people make long-haul flights in economy class without developing the condition.

We concluded that Mr W could not be said to have died as a result of ‘accidental bodily injury’, rather than from sickness, disease or some other naturally occurring condition. We also had regard to a recent court ruling (in re Deep Vein Thrombosis and Air Travel Group Litigation, TLR 17/01/03) in which it was decided that DVT was not an ‘accident for the purposes of article 17 of the Warsaw Convention’. In other words, DVT was not an unexpected or unusual event or happening external to the passenger. We therefore rejected the complaint.

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29/5
cancellation claim – firm rejected due to pre-existing medical condition and/or exclusion clause relating to anxiety, depression or psychiatric disorder – whether firm’s decision infringed the policyholder’s human rights

Mr B cancelled his holiday just a couple of days before 15 May – the date it was scheduled to begin. He said that he had become too unwell to travel. The firm rejected Mr B’s cancellation claim, citing
two clauses in the policy. These were:

• an exclusion clause relating to claims where the insured person was aware of any existing medical condition or set of circumstances that might reasonably be expected to give rise to a claim; and
  
  
• an exclusion clause relating to claims arising from anxiety or depression, or from any previously diagnosed psychiatric disorder.

Mr B’s GP had certified that the condition that had given rise to the claim was ‘acute stress reaction with anxiety’ and that this condition had started on 13 April. Mr B had not booked the holiday until the end of April.

When the firm rejected Mr B’s complaint and told him that it would report him to the police for his ‘threatening behaviour’ towards its staff, he said the firm had infringed his human rights and he brought his complaint to us.

complaint rejected
We noted a discrepancy between the original medical certificate that the firm had asked for when it was considering the claim and the copy that Mr B subsequently sent to us. The original clearly showed that Mr B’s medical condition pre-dated the booking of his holiday and the start of the policy. The copy had been altered to show that the illness began at a later date.

We decided the firm had been correct in excluding the claim on the grounds that Mr B had a previously-diagnosed psychiatric disorder. And since we were satisfied that Mr B had been aware of his illness before he took out the insurance, we agreed with the firm’s rejection of the claim on these grounds too.

We did not consider that there had been any infringement of Mr B’s human rights, not least because the firm was not a ‘public authority’ within the meaning of the Human Rights Act 1998. The firm was a private limited company and therefore not bound by the Act.

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29/6
medical emergency claim – whether policyholders were using travel policy as private medical expenses insurance

Mr and Mrs M were a retired couple who owned a villa in Spain. They had purchased an annual multi-trip travel policy that provided cover for up to 31 days per trip from the start of each trip.

On 1 March, Mr and Mrs M travelled out to their villa using cheap one-way airline tickets. On 24 March, Mr M fell ill and was admitted to hospital as an emergency case. When the couple subsequently returned home, they made a claim under their travel policy for Mr M’s emergency medical expenses.

The firm rejected the claim. It noted that Mr M had become ill towards the end of the 31-day period of cover and that, at that stage, the couple had still not booked their return flights. It therefore concluded that the couple had intended staying for a longer period, incorrectly using their travel policy as a medical expenses policy.

Mr and Mrs M denied this. They said that although they had still not bought their return flights at the time Mr M was taken ill, they had been intending to do so around that date. They said they had always planned to return to their home in the UK before the end of the month, when the 31-day limit on their travel insurance policy expired.

complaint upheld
It was possible that Mr and Mrs M had effectively been treating their travel policy as a medical expenses policy. However, Mr M’s illness had arisen within the period of valid cover and there was no evidence to suggest that the couple were not planning to return to the UK before the policy expired.

Cheap flights are widely available these days and people like Mr and Mrs M, who can be relatively flexible about dates, sometimes prefer to travel out on a one-way ticket, only buying the ticket for their return shortly before they fly home.

We pointed out to Mr and Mrs M that their complaint would not have succeeded if Mr M’s illness had occurred after 31 March (the expiry for the 31-day period of insurance) and they had still been in Spain at the time. However, in the circumstances we felt that the fair and reasonable solution was for the firm to pay this claim.

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29/7
cancellation claim – whether illness of pets is covered – whether pets are ‘family members’

When four of Mr and Mrs C’s eight dogs fell ill, shortly before the couple were due to go abroad on holiday, Mr and Mrs C cancelled the trip. They put in a claim under their travel policy but the firm rejected it, saying the policy did not cover them for cancellation in these circumstances. The couple then brought their complaint to us.

complaint rejected
The policy provided cover for up to £5,000 in relation to the unrecoverable cost of unused accommodation and travel expenses (plus up to £250 for unused kennel or cattery fees). But it only did this if the cancellation was caused by, among other things, the ‘serious illness of a relative’.

The policy did not define the term ‘relative’ and the couple argued that their pets were ‘family members’ so should be covered. The couple noted, too, that although the policy expressly excluded cancellation claims arising from the death of a ‘pet or other animal’, it did not expressly exclude claims that arose from a pet’s illness.

We did not uphold the complaint. Although Mr and Mrs C felt their dogs were ‘family members’, the policy did not refer to ‘family members’ at all – only to ‘relatives’. And we did not consider that a pet could reasonably be considered a ‘relative’ of its owner or owners. Although the term ‘relative’ was not defined in the policy, in our view it could only properly mean other human beings.

The policy did not provide cover for cancellation caused by the illness of a pet or other animal. The fact that the policy did not specifically exclude this occurrence did not imply that it would be covered. Insurance policies only cover those ‘perils’ that are expressly set out in the policy and that are not subject to any specific restrictions or exclusions (also stated in the policy).