Once I had a pre-existing condition, what guarantee was there that I was being charged what it really cost the insurance company in terms of risk?
The real fish-hook turned out to be that this diagnosis will hang over my travel insurance for life, even if a few simple lifestyle changes sort out the problem.
In one case heard by the Insurance & Financial Services Ombudsman, a policy holder had surgery for a kidney stone in 2003 and was told by his specialist in 2006 he no longer needed monitoring.
In January 2013, a decade after the operation, the man was admitted to hospital in the US out of the blue with the same symptoms and underwent surgery. His claim was declined and, unfortunately for the man, the Ombudsman agreed with the unnamed insurance company that he should have declared his pre-existing condition and paid an additional premium.
The moral of the tale is that once a pre-existing condition, always a pre-existing condition, if there is any chance of it returning. If you travel regularly, that can add up. The alternative is the risk of an eye-wateringly expensive hospital bill.
Susan Taylor, chief executive of Financial Services Complaints (FSCL), one of the bodies that handles travel insurance gripes, recommends erring on the side of caution and declaring any possible conditions that could recur.
You don't even need to know you have the illness to be turned down on a claim. While travelling overseas in 2013-14, Mr and Mrs B's son, Toby, required medical treatment for a rare, infectious disease. Although the parents weren't aware their son had the illness before travelling, their claim for specialist treatment overseas was declined because an independent medical specialist determined that symptoms the boy had presented with at the doctor two years earlier were of that disease.
This week I tested a few of the policies on myself with the same condition and itinerary. The pre-existing condition additional premium came out at $50 for Tower and ASB's Gold Card, $75 for Southern Cross Travel Insurance (SCTI), and at the AA it ranged from $101.26 with no excess on the condition to $61.72 with a $5000 excess.
This doesn't automatically make Tower the top choice. Anyone buying cover needs to look at what's actually covered by the underlying policy and the exclusions. If, for example, you plan to ride a moped on holiday, or play in a football match, one insurer may cover you and another not.
On the subject of pre-existing conditions, one thing the public rarely appreciates is that it's not just the people travelling whose pre-existing conditions matter. If you want to cancel your trip or return home early because granddad is rushed to hospital or dies, you may get a shock.
If granddad's condition is pre-existing, says SCTI chief executive Craig Morrison, you're not covered because you are "by default aware there is a risk that you will have to cut your trip short". If it's unexpected, the maximum payout is $2500 a person, up to a maximum of $5000 a journey. Other insurers will differ in their cover.
Don't, says Morrison, buy a $40,000 non-refundable cruise when you know a relative is sick and then expect your insurer to pay out. "This is one of the most misunderstood aspects of all travel insurance policies and accounts for a substantial number of Ombudsman cases."
It's not just pre-existing conditions that can trip travellers. Taylor highlights all the usual chestnuts that she, the Ombudsman and journalists bang on about to what seems like deaf ears. These small-print exclusion clauses leave many an unsuspecting person who hasn't read their policy high and dry.
They include:
• Customers not "activating" their credit card travel insurance by buying some or all of their travel with their credit card.
• Participation in activities such as motorcycle riding, competitive sport, hunting, caving, off-piste skiing, hang gliding, kite surfing, ocean yachting, parachuting, rock climbing, remote area touring or diving.
• Credit-card travel cover void from day one because they stayed longer than the permitted time, which is often 40 days.
• Claiming for holidays cancelled due to changes in personal circumstances.
• Failing to hold a return ticket.
• Working or volunteering on your holiday.
• Leaving valuables in locked cars or on the beach while you're swimming.
• Claiming for events that could be predicted. If, for example, as happened with the Bali ash cloud, you book after a problem emerges, you're not covered.
Some interesting questions arose as a result of my enquiries this week. For example, I was asked by a SCTI customer whether she would be covered if travelling to Turkey, which is listed on the Government's safetravel.govt.nz website as being "extreme risk" in some areas and "high risk" in others.
The Southern Cross cover excludes "events where a travel advisory risk rating of 'high' or 'extreme' has been published on the New Zealand Ministry of Foreign Affairs and Trade website (www.safetravel.govt.nz) prior to your start date of journey".
Morrison clarified this. He says if you travel to an extreme- or high-risk country, you'll still be covered for expenses such as theft, illness or injury provided they don't relate to the extreme- or high-risk events. Only the actual events covered in the government advisory aren't covered.
Don't assume, however, that all insurers will take this approach when you head off to visit Turkey, Afghanistan, Egypt, Kenya or other countries listed as high or extreme risk.
Tower, for example, says there is no cover under any section of its policy if a customer travels to an extreme-risk location. "If a customer was already booked to go to an area that, since the insurance was purchased, was upgraded to extreme risk, the policy holder can then submit a claim for cancellation," a spokeswoman said.
Travel insurance policies are complex.
If you find your claim declined, seek a review and, if that fails, a letter of deadlock so you can complain to the Ombudsman or FSCL. Sometimes ambiguous wording can work in your favour and a claim be accepted. The Ombudsman dealt with one case where a man's claim was turned down on the basis of his having a pre-existing condition.
The Ombudsman said the definition of pre-existing condition was ambiguous, and ruled in his favour. One insurer, I note, is still using the same ambiguous wording.
