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John McKiggan Q.C.
John McKiggan Q.C.
Attorney • (902) 423-2050

"Why won't my travel medical insurance pay my claim?" Advice for Canadians travelling South

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(What to look for – and look out for - in your travel medical insurance policy)

It was chilly here in Halifax last week. Made me wish I was somewhere warm sitting on a beach. Like our famous Canadian geese many of us choose not to hang around up North when the winter weather comes around.

Travelling South for a winter break may be a great way to cure those winter blues. For some Canadian snowbirds, it is a regular part of their winter routine. But heading South can come with unanticipated costs if you are not careful about your medical insurance situation.

Expensive Errors

Recently CBC news reported on the plight of two Canadians who were faced with extraordinary medical bills when their travel insurance policies refused to pay their claims. The two unfortunate seniors got sick while on holiday in the United States. Like prudent travellers, both of them had the foresight to buy travel medical insurance. But both of them had their insurance claim denied as a result of what they belive were honest mistakes on their insurance application forms.

"Chronic" Condition?

The first senior, John Toljanich, faces a medical bill of $112,000.00, for treatment for pneumonia he received while travelling in California. His travel insurance company denied his claim because he indicated he did not have a chronic bowel disorder. Toljanich had been diagnosed with ulcerative colitis in 1965 but had been in remission for decades because he takes medication to prevent flare ups.

Manulife insurance denied his claim because of this “misrepresentation.”

Timing Important

The second unfortunate senior, Joanne Parr, faces a medical bill of $128,000.00 after she was treated in Florida for kidney failure. She stated on her insurance application that she had not been treated for heart problems in the "previous 12 months". She claims she misunderstood when the 12-month clock would begin to run: “My mind was thinking departure date, because that is when I was paying my premium from.”

Post Claim Underwriting

I have reviewed many cases where tourists travelling outside the country have become ill and had their travel medical insurance claim denied. In most cases the problems arise because of the industry practice known as post claim underwriting.

Travel medical insurance companies ask consumers to fill out an application form that often contains vague or confusing questions about the consumers health and medical history. But the insurance company only conducts a detailed investigation into the consumers medical history after they make a claim.

Obviously this practice is cheaper for insurance companies. But if the consumer has made a mistake in how they filled out the application form, the travel medical insurance company can use that mistake as grounds to deny the claim on the basis of misrepresentation even if the mistaken medical condition has nothing top do with the illness that lead to the insurance claim!

This is the situation that Mr. Toljanich found himself in when his claim to be reimbursed for treatment for pneumonia was denied because he was once diagnosed with colitis.

What to look for in a Travel Medical Policy

  • Disclosure requirements: Answer all questions honestly and in full. Even if you do not think your medical condition is relevant, make sure you disclose it. When in doubt, disclose.
  • Coverage for pre-existing conditions: Many policies will not cover a pre-existing condition if you are under treatment of if there has been a change in your treatment. But the definition is different in every policy.
  • Medical evacuation: Payment for travel costs to bring you back to Canada for medical care.
  • Medical escort: Coverage of the costs of a health care worker to accompany you during medical evacuation.
  • Emergency transportation: Coverage for the costs of ambulance or medivac transport to hospital.
  • Geographic coverage: Make sure the policy actually covers you for the location you are travelling. Not a problem for travel to the United States, but may be an issue for people travelling to more exotic locations.

What to look out for in a Travel Medical Policy

  • Exclusions and Limitations: Make sure you carefully read all exclusion clauses. This tells you what the insurance company will NOT cover. If you have questions call the insurance help line. These calls may be recorded, but make notes and keep a record of who you talk to and the answers you are given.
  • Definitions: Take a look at how the policy defines terms like "pre-existing condition", "stable" or "unstable", "treatment" and "investigation". If you have any questions about whether your medical condition meets a particular definition, ask your doctor.
  • Change in Status clause: Look out for any clause that allows the insurance company to cancel the policy if there is any unreported change in your health before your trip. For example even a simple change in the dosage of your medication may be enough for the insurance company to deny coverage.

Safe travels!

A travel medical insurance provides you with some extra peace of mind on your vacation. You will not have to worry about any expenses that might arise if any medical attention is unfortunately required. Instead, you can lay back and de-frost in tropical warmth – if that’s what you’re into!