A Better Travelling Companion

Letter to the Editor

Some travel insurance policies have very strict and onerous requirements for notification. The “as soon as practicable” concept that seems logical and fair to you and me may not conform with policy language. Our group-out-of-country medical expense policy has a similar 24-hour clause, but goes on to state that: “…failure to do so, without reasonable cause, will result in the reduction of eligible benefits amounts payable by 20%.” Thus, even if you don’t fully comply, without a valid reason you still would be reimbursed 80% of costs.

As a typical P&C broker, we rarely sell stand-alone travel insurance. Usually, it’s wrapped into an employer benefit plan, a credit card plan, travel products sold by CAA and the travel industry, generally. Your broker should have challenged the policy wording language, given the circumstances you described. In fact, had we received a quick call from you, we would have interceded with the carrier and assisted with the claim notification from here–a lot easier to do from Toronto than in Africa. A claim denial would have been met with resistance and a reasoned argument as to why the minor breach that did not prejudice the rights of the insurer should be disregarded.

Your conclusion is excellent. Forget the cheap (too cheap sometimes?) price, the glossy brochure, the appearance of a global 1-800 number. It’s service and security that you pay for. It may come at a higher price. [And] sometimes, you need an advocate that works for you, not the carrier, to right a wrong.

About three years ago, one of our clients received a “denial” letter regarding a liability claim where the quantum of the loss was approximately $1.3 million (CDN). This denial left them to sort out a major problem, absent insurance coverage, with one of their key clients. We felt the denial of coverage position was wrong, both in law and the intent of a general liability policy. We did some research on case law, the policy wording language, the nature of the client’s business and their reasonable expectations of coverage to support a counter argument to the claims examiner. After further consideration, the insurer relented, admitted coverage and paid the loss. I suspect our client was pleased that they weren’t dealing with a 1-800 number.

I’m sorry to hear of your unfortunate experience and hope your fiance is back in good health. It’s very scary to be far from home and find yourself in the situation you were in. If your coverage was part of your employer plan, I’d review with your HR department. The decision sounds arbitrary and unreasonable.

All the best to you,

Doug Poole, CIP, President

© Copyright 2010 Rogers Publishing Ltd. This article first appeared in the February 2010 edition of Canadian Insurance magazine.

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