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Woman sues travel insurer over mental payout refusal

October 30, 2015 Headline News, Travel Law 1 Comment Email Email

egtmedia59The outcome of a young Melbourne woman’s court battle against insurance giant QBE could set an important precedent for travel insurance. QBE contends that the outcome could potentially push up the cost of policies.

The case involves Ella Ingram, 21, who 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.

QBE refused to refund the trip’s cost after Ingram cancelled. Ingram is now suing QBE for the AUD 4292 that she lost. Although Ingham had travel insurance through QBE and her depression wasn’t a pre-existing condition, the QBE policy excludes mental illness as a justification for cancellation.

Laywers for QBE have argued before the Victorian Civil and Administrative Tribunal that the company is within its rights to refuse coverage for mental illness in its travel insurance.

Ingram argues she was discriminated against under the Equal Opportunity Act.

ABC News has reported QBE’s barrister Andrew Naylor saying that actuarial data showed a high prevalence of mental illness, not only in the Australian community as a whole, but particularly among young women in the same age range as applicant Ingram.

QBE is vigorously defending the action, arguing that coverage in such cases would be financially unviable and “would have imposed an unjustifiable hardship on QBE”. The company has lined up two actuarial professors to give evidence and the professors have completed a report which has been submitted to the tribunal, the ABC reported.

QBE argues that excluding mental illness from travel insurance is standard industry practice. Its says the impact of the finding could have ramifications for the cost of travel insurance polices across the board.

The hearing continues.

Choice, the consumer advocacy body, reviewed 35 travel insurance policies and found only two insurers, Bupa and CGU, who offered cover for mental illness, and then only in certain circumstances.

Written by Peter Needham

Currently there is "1 comment" on this Article:

  1. andris says:

    Hope you succeed Ella , good luck . From the consumer perspective TI is overpriced and there should be a mandatory required to provide a minimum level of coverage .

    The characteristics of TI is a high cost to purchasers , high commission paid to sellers of the product and a miniscule payout ratio for claims overall

    In my view the product is highly profitable for the insurers . There maybe 35 different policies but there are only 3 insurance company’s under writing the policies

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