Insurer Held Accountable for Misleading Explanation of Policy to Elderly Traveller

0

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The claim was initiated after the man's wife had a severe fall down a flight of stairs during their trip to Thailand. She sustained multiple injuries, including a fractured hip and head trauma, which required her to be hospitalized for more than three weeks. Additionally, to ensure a safe journey back to Melbourne, the claimant had to purchase a business class flight for his wife, allowing her to lie flat and minimize the risk of complications.

Zurich Australia denied the claim based on the policy's exclusion of overseas medical expenses for individuals over 80 years old. However, Zurich claimed to have offered an "upgrade" to the policy, providing medical coverage for individuals over 80, which the claimant did not opt for.

The complainant obtained the policy through a local branch of his bank, referred to as CB, which offered it as a benefit for specific credit card holders. At the time of purchasing the policy, both the complainant and his wife were 81 and 80 years old, respectively.

Making an effort to follow the correct procedure given his limited computer skills, Mr. E visited the local CB branch on June 30. He expected the staff to guide him through the application process for the policy.

Mr. E alleged that the CB staff failed to inform him about the need to "upgrade" the policy in order to ensure adequate coverage for medical expenses. He left the bank under the impression that he and his wife were appropriately insured, even receiving an email confirmation from the insurer stating that the policy had been activated.

AFCA considered the claimant's assertion that a bank teller, referred to as SH, had assisted him during the application process. Despite Zurich's objections, the ruling ombudsman agreed with Mr. E's account.

The ruling acknowledged that SH had neglected to disclose the requirement to "upgrade" the policy, necessary for the claimant and his wife to have coverage, despite the bank being aware of their age. It stated that although SH's actions were unintentional, CB caused the insured party to believe they had suitable coverage.

"Given CB's knowledge of the complainants' age, this omission should have been disclosed," AFCA stated.

"SH's oversight significantly contributed to Mr. E's unwitting failure to apply for the policy upgrade. Furthermore, this omission induced Mr. E to enter into an insurance contract that he believed provided adequate coverage. However, unbeknownst to him, the policy was essentially useless in terms of overseas medical expense coverage for both him and Mrs. E."

Zurich argued that CB employees were not authorized representatives and thus were unable to offer any advice on the credit card insurance being offered. However, AFCA dismissed this argument as an attempt by the insurer to absolve itself of CB's shortcomings, stating that the bank acted, at least partially, in the insurer's interest.

The decision mandates that Zurich accept the claim and provides a compensation of $4000 ($2000 for each complainant) for non-financial losses resulting from the insurer's claim denial and subsequent challenges.

"Throughout the claims process, the insurer's stance has unfortunately caused the complainants, particularly Mr. E, to feel accused of dishonesty," expressed AFCA.

"They also feel that their recollections have been questioned. Moreover, the insurer's position in this claim has been based on flimsy evidence."

Published:Friday, 17th Nov 2023
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Clear

Strengthening Agricultural Insurance: Rural Affinity and Munich Re's Renewed Partnership

10 Feb 2026: Paige Estritori

Rural Affinity has renewed its partnership with Munich Re Specialty - Global Markets under a new five-year agreement, continuing a collaboration that began in 2006. This renewed alliance aims to support Rural Affinity's efforts to expand its agricultural insurance offerings across Australia and introduce new products leveraging technology and innovation. - read more

WFI Insurance and Rural Aid Join Forces to Assist Farmers in Crisis

02 Feb 2026: Paige Estritori

In a significant move to bolster support for Australia's agricultural sector, WFI Insurance has announced a formal partnership with Rural Aid, a leading rural relief charity. This collaboration is set to provide much-needed assistance to farmers and rural communities affected by recent natural disasters, including the devastating bushfires in Victoria and severe weather events in Queensland. - read more

Elders Insurance Warns Farmers of Escalating Summer Storm Threats

02 Feb 2026: Paige Estritori

As the Australian summer approaches, Elders Insurance is calling on farmers to brace for an anticipated increase in storm-related damages. Recent claims data reveals a concerning trend, with summer months accounting for nearly half of all storm-related farm insurance property claims over the past two years. - read more

Significant Reduction in Farm Liability Claims Reflects Enhanced Safety Practices

25 Jan 2026: Paige Estritori

Recent data from WFI Insurance indicates a substantial 75% decrease in farm liability claims over the past year, suggesting that Australian farmers are adopting more effective safety measures. This decline is particularly notable in incidents involving falls from height, which have reached their lowest level in four years. - read more

Steadfast Unveils Prevail: A New Era in High Net Worth and Farm Insurance

17 Jan 2026: Paige Estritori

In a significant development for the Australian insurance landscape, Steadfast has announced the launch of Prevail, a new specialist agency designed to cater to high net worth individuals and the farming sector. This initiative brings together three well-established underwriting agencies-Mansions, Dawes, and Argis-under a unified brand, aiming to provide comprehensive and tailored insurance solutions. - read more

Harland Green Launches Comprehensive All-Risk Insurance for Large-Scale Farms

17 Jan 2026: Paige Estritori

Harland Green, a newly established Lloyd's coverholder, has introduced an all-risk farm insurance package specifically designed for large commercial farming operations in Australia. This initiative aims to address the complex and evolving needs of the agricultural sector by offering comprehensive coverage that encompasses various aspects of farm operations. - read more

Click for more Insurance News