19/09/2023 Update – Media Release Statement: An Urgent Call for ASIC to Investigate Unfair Alcohol-Related Clauses in Travel Insurance.
… going to talk about the cost of airfares and if you’re heading overseas, if you can afford an overseas airfare, you have your passport, ticket, itinerary, and you’ve bought travel insurance. But as you’ll hear from my next guest, there’s a good reason to really look closely at the fine print on the travel insurance. According to Peter Carter, who’s a lawyer with Carter Capner Law, not enough of us are doing our due diligence on what may happen in the event of an accident overseas. Peter, travel insurance is sort of one of those tick and flick for many. Why do I need to pay more attention to what I’m paying for when I’m heading overseas?
Peter Carter (00:35):
Good afternoon, Steve. Well, it’s because you need to look at the fine print. We’ve learned recently that one insurer has tried to or has indeed denied cover because of alcohol consumption to the traveler.
Say that again. I’m sorry, I’m trying to get my head around that.
Peter Carter (00:58):
Well, the lady suffered a dreadful holiday in Thailand and has since died of her injuries, but the insurer refused to pay the benefits under the policy. They refused to meet the hospital charges in Thailand and refused to meet the cost of a medevac back to Australia because they say that she was intoxicated to an extent, which was specified in the policy, but no one knew about.
Okay, so I will admit I don’t … I mean, it’s been a while since I’ve traveled overseas, quite a while, but I didn’t read the fine print. I asked the travel agent, “What does it cover?” And they give you a couple of options and I go, “Yeah, okay, that’s great. I’ll take that.” I don’t actually read the 14-page terms and conditions fine print, and I’ll be very surprised if anyone actually did, Peter Carter.
Peter Carter (02:01):
Well, that’s exactly right. No one does. And the fact that it’s buried in the fine print means that the injured traveler might have some recourse against the travel insurer because it’s not transparent. It might be regarded as an unfair term under the Australian Consumer Law.
Often when you get a credit card these days or to travel overseas, it comes automatically with a travel insurance policy, usually a credit card from a bank. So one of their selling features is if you have our credit card and use it overseas, you’re automatically covered with travel insurance.
Peter Carter (02:39):
Well, in my experience, that cover isn’t a great cover, but this was a private policy that the traveler had taken out in addition to whatever credit card insurance she had, and the insurer still denied cover. So it’s important to know what’s in the travel insurance. The other thing to know is that even if the claim is being paid and the insurer fronts the medical expenses overseas, all those benefits stop the moment you step foot back in Australia. So travel insurance is only part of the remedy for an injury overseas, and many injured travelers may not be aware of that.
Peter, you’re a lawyer. Most people aren’t lawyers. If an insurer is selling a private insurance policy before I travel overseas, do they have any obligations to make it clear in plain and simple English what they will and will not pay out upon? We keep hearing people go to Bali and have scooter accidents because they have drinks or something stupid. Do insurers have any legal pressure on them to make it very plain or clear to someone who buys one of their policies as to what they’re covered with?
Peter Carter (03:58):
Well, it’s important to note that consumption of alcohol when riding a scooter is entirely different to consuming alcohol when you’re in your hotel room, which was this lady’s situation. She was denied cover even though the consumption of alcohol was nothing to do with a vehicle. She had an accident, slipped over, and that was the cause of the cover being denied. But to answer your question, yes, under the ASIC Act, which applies to insurers and the same provisions under the Australian Consumer Law, terms can be considered unfair if they are not transparent and are buried in that way.
My point is that you’re a lawyer. I mean this is your stock-in-trade. You know how to read the fine print, but travelers don’t. Even if they did read the 15 pages, they wouldn’t have the legal knowledge to recognize where the potential pitfalls are. Say you get meningitis when you’re in Paris or something and you have to be flown back, you would have a way of knowing that, but Mr. And Mrs. John and Mary Citizen, what chance have they got?
Peter Carter (05:11):
Exactly. And courts are well aware of that. So that’s why it’s worth asking the question, or not just accepting the travel insurer’s ruling on it. It’s not difficult to get a lawyer’s opinion on an insurance denial. And remember, insurers are in the business of claims denial, so it’s very important to indeed get that advice.
What do you do if the insurance isn’t enough to cover all your costs?
Peter Carter (05:39):
Well, it goes to the point about the travel insurance ending the moment you step foot back here. What has to be done is you need to look at what are … There might be other opportunities to recoup compensation, for example, for future loss of income. And that can be investigated in terms of … That depends a lot on where the injury occurred, but sometimes we can litigate those things in Australia or sometimes we can recruit lawyers overseas to assist. But it’s always worthwhile to consider all those circumstances and not give up.
All right. Apparently you have sort of five key messages that you think it’s worthwhile remembering when looking at travel insurance. What are they?
Peter Carter (06:29):
Well choose the travel insurance carefully because many policies won’t cover the type of activity that you want to engage in. Ask the travel agent if there are any exceptions that you need to be aware of. Book as much of your trip in Australia as there is a better likelihood of legal recourse for any accident. And if the travel insurer refuses to pay, gets some legal advice. And finally, if you’re injured overseas, explore your legal options when you get back as to whether there’s some recourse for the actual accident rather than under the policy. That’s a developing area of the law and recourse is available in many cases.
Is it correct, so you said that insurance companies are in the business of denying claims. The rate of denying claims, is it staying the same? Are they doing it more? I’m trying to get, are they getting tighter on their interpretation of their own policies?
Peter Carter (07:36):
In my experience, in 30 years of being in this business, it goes in waves. It’s part of what they call the insurance cycle. When they’re short of cash, they deny more claims. When they’ve got plenty of money, they’re more willing to pay.
Thanks for your time.
Peter Carter (07:54):
Peter Carter is from Carter Capner Law.