CHOICE insurance policy review finds coverage gaps

CHOICE insurance policy review finds coverage gaps

CHOICE insurance policy review finds coverage gaps An insurance review of 35 travel policies has found that only two insurers may cover consumers for mental illness while traveling.

The review, conducted by consumer advocacy group CHOICE, found that policies from CGU and Bupa, may cover customers for mental health issues while abroad but others lack the coverage.

Head of media at CHOICE, Tom Godfrey, told Insurance Business that the gap in coverage could leave almost half of the Australian population vulnerable and called upon the industry to address its failures.

“I think the insurance industry has failed to keep up with what is going on in society,” Godfrey said.

“The fact is, that nearly 1 in 2 Australian’s have had some sort of mental health issue at some point in their lives and the insurance industry has clearly failed to acknowledge that and appropriately price the risk.

“I don’t think they’ve dealt with it [mental health] at all well, and it’ll be really interesting to see what this test case does. I think we need some clarity on it, it’s clearly a major problem and we need the insurance industry to come to the party.”

Godfrey called for more clarity from insurers over mental health issues as the lack of coverage, and a lack of consumer knowledge, could leave consumers at risk.

“Our look at the fine print from two of the biggest insurers - Bupa and CGU - found they may cover you however they won’t pay claims for ‘disinclination to travel’ due to a mental health condition including nervousness, anxiety, depression, or stress-related disorders.
 
“Travelers need to be aware that very few travel insurers cover mental health claims, leaving people with mental health issues high and dry.”

Godfrey noted that insurers could do more to help educate consumers when it comes to all policy exclusions, not just those related to mental health.

“A single visit to a therapist for common ailments including stress, insomnia, short-term depression or mild anxiety can be enough for insurers to deny cover or reject a claim if it isn’t disclosed, even if the incident occurred more than a decade ago or is ongoing but well managed.

“Obviously, we support these things being written in plain English and making it easier for consumers to understand,” Godfrey continued.

“Often the detail that you need is in very, very fine print and often quite complex language so anything that helps consumers understand the finer details and when we look at exclusions more broadly, not just mental health but around alcohol, and otherwise, pre-existing conditions which is one of the bigger ones that we get complaints about, and also things like adventure sports, people don’t realise unless they read the detail that they might find themselves in an injury or had a few too many drinks and get in a bit of trouble and then landed with a massive bill in a foreign hospital

“I think it’s really, really important for the insurance industry to do everything they can to help educate consumers about what is and isn’t in these policies because unfortunately a lot of people just don’t know.”
 
4 Comments
  • md 28/10/2015 9:57:52 AM
    Most travel policies exclude pre-existing conditions unless you request the cover. You are asking consumers to purchase on cover, but everyone wants the cheapest price, you cant have both. If you want the cover you have to pay for it and get the right advice. See a broker!
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  • Paul 28/10/2015 10:05:28 AM
    It really is a bigger issue than mental health. Insurers simply should not be allowed to sell travel cover. Just this week I had a referral for bank travel policy underwritten by a major insurer that left the consumer with no cover for his wife who was stuck in the Philippines. I am a senior practitioner and a Fellow of ANZIIF and I struggle to get my mind around the numerous conditions, exclusions and limitations of travel insurance. Financial Services Reform has been a disaster as insurers can flog their dodgy products through banks and travel agents without the corresponding requirement to give advice. Choice and other groups should agitate for a level playing field in insurance. The additional cost to employ competent people to give advice would level up the playing field for brokers who actually give advice for a living, are properly trained and experienced and carry expensive Professional Indemnity.
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  • John 28/10/2015 11:32:02 AM
    My issue with CHOICE is that they only seem to review direct offerings. They're reviewing the bottom of the market through to the middle of the market.

    Whilst they don't claim to review every policy in the market, the inference is that their top ranked policy is one of the best in the market. This isn't really the case, the best direct policies are pretty average when compared to a premium personal policy or a commercial policy. Some of the policies that they review should honestly get a 1 or 2 out of 10.

    They seem not to include broker policies because there is no certainty of pricing etc. This is true to a small extent but it also does the public a disservice because top grade policies that address a lot of issues are never reviewed & the public never realise that they exist.
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