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Big travel insurers remove mental health exclusions

July 6, 2017 Headline News No Comments Email Email

Cover-More Australia and QBE Insurance have removed exclusions in their policies that relate to mental illness.

The exclusions previously denied cover to clients who cancelled or changed travel plans because of a mental illness that developed after they bought a policy.

The insurers’ change of course, reported by the Sydney Morning Herald, has been welcomed by public interest and mental health advocates.

Mental Health Australia chief executive Frank Quinlan told the paper he hoped more insurers would “see the sense in removing such exclusions”.

Ella Ingram

With some policies, a traveller who takes out travel insurance and who develops psychosis overseas may not be covered, whereas a traveller who develops, say, typhoid overseas is covered.

The policy change follows a landmark legal decision 18 months ago in which QBE was ordered to reimburse a Melbourne woman the full cost of a New York trip she was forced to cancel after developing depression – and to pay her an additional, far greater, sum for hurt and humiliation.

The outcome of Ella Ingram’s legal battle against QBE set an important precedent for travel insurance and its effects are still being felt.

Lawyers for QBE had argued before the Victorian Civil and Administrative Tribunal (VCAT) that the insurer was within its rights to refuse coverage for mental illness in its travel insurance.

The case arose after Ingram, 21, had been due to go on a school trip to New York in 2012, when she was 17. After she booked the trip, she developed severe depression and was advised by doctors not to go. When she followed their advice and cancelled, QBE refused to pay out.

At the time, Consumer advocacy body CHOICE reviewed 35 travel insurance policies and found only two insurers, Bupa and CGU, offered cover for mental illness, and then only in certain circumstances.

In the first ruling of its kind, VCAT member Anne Dea found in December 2015 that Ingram’s depression was a disability and by refusing to insure her, QBE “engaged in direct discrimination”.

VCAT found QBE breached the Equal Opportunities Act by issuing Ingram a policy that included the mental illness exclusion and when it refused indemnity based on that clause.

The company was ordered to pay Ingram AUD 4292 to cover lost travel costs and an additional AUD 15,000 in compensation for hurt and humiliation.

In a statement issued just after the ruling, QBE said it understood concerns about mental health but the company would have to increase costs to cover it.

Written by Peter Needham

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