19/09/2023 Update – Media Release Statement: An Urgent Call for ASIC to Investigate Unfair Alcohol-Related Clauses in Travel Insurance.
… Claiming on your travel insurance if you have an accident. A prominent accident and travel compensation lawyer is calling for the Australian Securities and Investments Commission to investigate what he says are unfair terms and claims practices of some travel insurers. It comes after some insurance claims by Australians while holidaying overseas were denied due to the amount of alcohol consumption. Peter Carter is a director of Carter Capner Law and a former national president of the Australian Lawyers Alliance. Good afternoon.
Good afternoon, Glen.
Your concern has been prompted by some recent incidents. So first, what can you tell us about what happened with those?
Well, at least in one case, it appears that the insurance adjuster or investigator has by admission of the insured’s family member or some other means determined that the amount of alcohol, the term in the policy is too much alcohol was drunk by the insured and they said, “You’re on your own. We’re not paying for your hospitalization costs and we’re not going to medevac you back to Australia.”
There’s been more than one instance, yeah?
There has. There’s another one. A Perth lady who had an accident in Croatia that may also have been denied on that ground. A very serious injury and the claims denial in that case is also equally grave.
And that’s left what the family to try and come up with the money for the medical and repatriation costs?
That’s right. Travel insurance only covers you while you’re away. But one of the basic things that it’s meant to do is that if you have a serious accident, you’ll be repatriated at the insurer’s cost. So it’s very important. Hospitalization while you’re there until you get back to Australia by safe means should be covered by the travel insurer. And if there’s any exclusions of an unusual nature, which I believe these are, they should be pointed out. They should be pointed out very clearly.
Let’s do that. What exactly do some of these policies say when it comes to alcohol consumption?
Well, there’s one policy that the exclusion is too much alcohol. If you drink too much alcohol, we can deny your claim and they can determine that by a number of means. One is a blood alcohol content reading, which we’re familiar with on roads, and that’s a high reading of 0.19, but then they say that we can determine this by other means as well, including your own admissions or witness statements or your activity. So my point is that those ways of determining getting an accurate blood alcohol reading by witness statements are very unreliable.
So a couple of these policies have that phrase, it can reject a claim if you put yourself in danger from alcohol use. Does it rest on that issue of causality? That the incident that forms the basis of the claim was due to the drinking?
It does, absolutely. And one wonders what conclusions the insurance company is jumping to when it arrives at that conclusion. Just because someone has a high alcohol reading doesn’t mean that their behavior when affected by alcohol contributed to it.
You’ve suggested these are just blanket statements, an excuse to try and deny claims. Do you think people get that, that their drinking could be such a factor and potentially void their claim? Is that a little known fact?
Well, it’s not disclosed anywhere on the insurer’s websites, except when you dig deep into the product disclosure statement. It’s not disclosed by the insurance investigator when he makes contact with you in Bali or Berlin that the reason or one of the reasons why he’s making contact is to try and deny the claim and by asking questions, “How much did you drink?”
You say insurers aren’t disclosing it and are misleading consumers, but you can see that one insurer does have the exclusion on page 52 of their product disclosure statement. You described that as being buried. But I imagine they would say that technically it is disclosed.
Well it’s disclosed, but there are lots of other things disclosed on the website, on the front page or very close to it about the policy, important things that people expect to know.
So you’re wondering why that’s not there?
Exactly. It should be disclosed with the same priority.
What do you want ASIC to do?
Well, I think it’s something that’s worthy of their investigative skills and authority. It fits into the category of unreasonable claim practices that they are very concerned about generally in the general insurance industry. And the wording as well fits into the category that they’ve recently taken general insurance to task about in the motor accident area.
So finally, what’s your advice to travelers making a claim?
Well, firstly, get advice about what exclusions your policy deals with. Not all policies are the same. Some barely referenced this issue. Some appear to have very, what I would consider opportunities for the insurer to deny the claim arbitrarily. So that’s the first thing. And the second thing is to certainly don’t treat insurance investigators with some circumspection. Don’t tell them, “Oh yes, I was blind,” or something like that. And thirdly, to get advice when they return to Australia if necessary, regardless of whether they have travel insurance, because sometimes we can do something about an accident compensation wise, even from Australia.
So don’t talk about any sort of alcohol consumption in the first exchange.
Well, that would be my advice. Certainly not do that. That would be an admission against the traveler’s interest and they should know that that’s what the appropriate standard is. Don’t say anything.
All right, well let’s see what ASIC does with your written complaint and see whether we get any action on this at all. But for the moment, Peter Carter, thanks for talking to us.
Peter Carter is from Carter Capner Law, a former director of the Civil Justice Foundation of Australia with some interesting information for us all. You’re listening to ABC News Radio Sport…