Consumer complains to us that his claim is turned down unfairly because his insurer hadn’t clearly defined the term ‘accident’ in his policy


Jay complained to us because his insurer declined his personal accident claim.

What happened

Jay had gone blind because of burst blood vessels in his eyes. This was caused by a problem with the main artery in his neck – leading to a build-up of pressure in his eyes. The insurer said the injury didn’t meet the criteria to be considered an accident – so it didn’t pay the claim. 

Jay disagreed and felt his insurer should pay the claim. He raised a complaint and wasn’t satisfied with the final response, so he decided to get in touch with us to make a complaint. 

What we said

We started by checking the policy terms. Jay’s policy would pay out if he lost his sight because of an accident. But the policy didn’t define ‘accident’.

The insurer said they applied the definition that’s commonly used in the insurance industry, which is ‘an unforeseen and unexpected event caused by external, violent and visible means’. Because Jay’s injury was caused by a problem with his artery, the insurer said there wasn’t an external cause.

We said that although this definition might be common in the insurance industry, where a word isn’t specifically defined in a policy, we use the ordinary, everyday meaning. We interpreted the word ‘accident’ as ‘an unforeseen or unexpected and unfortunate occurrence’.

We didn’t agree with the insurer, because this definition doesn’t require an external cause. Instead, we felt Jay’s injury was the natural result of an unforeseen, unexpected and unfortunate cause – and therefore met the general definition of an accident.

The insurer argued that personal accident policies are not designed to cover injuries caused by sickness or disease. We reviewed the policy further and found that the policy didn’t contain this exclusion. So we didn’t think it was reasonable for the insurer to rely on an exclusion that wasn’t written into the policy.

In this specific circumstance, we told the insurer to pay Jay’s claim and apply 8% simple interest from the date of his injury until the date of settlement.