Family wins travel insurance dispute over pregnancy exclusion

14 April 2023

Travellers who cancelled their trip due to their daughter’s health emergency will be reimbursed for their losses after winning their claims dispute against their insurer.

The complainants cancelled their plans on May 27 last year, just two days before they were due to leave, after their daughter was hospitalised with a haemorrhage. They lodged a claim with their insurer on June 7 for compensation for non-recoverable losses.

Zurich Australia declined the claim, saying that the haemorrhage was a result of the daughter’s pregnancy and resulted in an emergency caesarean. It said the policy excluded claims arising from the pregnancy of any person after the start of the 26th week of pregnancy, and the insured’s daughter had been 34 weeks pregnant at the time.

The claimants said there was “no medical evidence” to suggest that the pregnancy caused the bleeding. They stated that their daughter did not need an emergency caesarean, but it had been considered and noted that the baby was born several weeks later.

The Australian Financial Complaints Authority (AFCA) acknowledged that the policy held restrictions on claimable events but said Zurich Australia was required to show that the daughter’s pregnancy caused the incident.

The insurer said the claim had been referred to its medical review team but did not provide any information on the outcome of any review.

AFCA said it was not satisfied that the available evidence showed that the haemorrhage arose from the pregnancy. It noted that information was unclear on what part of the body had suffered the bleeding, and observations from the claimant’s doctor did not highlight the pregnancy as an identifiable cause.

The ruling acknowledged the insureds were compelled to cancel their trip due to “unforeseeable circumstances outside their control” and required Zurich Australia to accept their claim for $8498 plus interest.

“The insurer is not entitled to deny the claim, as it has not shown the exclusion it relies on applies,” AFCA said.

Click here for the ruling.