Person B was an overseas student studying in New Zealand. She arranged travel insurance to cover her medical costs while in NZ.
When she became pregnant, while in New Zealand, her medical expenses were covered by government funding.
However, after her baby was born her GP referred her to the physiotherapy clinic for treatment of a muscle strain she suffered during labour.
She believed the physio appointment would be covered by government funding and was surprised when she received an invoice from the hospital.
When she queried the invoice, she was advised that government funding only covered medical treatment up to six weeks after
the birth. Her physio appointment was in the seventh week and so
not covered by government funding.
She submitted the invoice to her insurer. The insurer declined the claim because a statement from the physiotherapist referred to a muscle strain during labour and the policy excluded cover for any loss arising directly or indirectly from pregnancy or childbirth.
Person B felt this decision was unfair and complained to FSCL.
Person B understood that her travel insurance would cover her for any medical treatment in New Zealand that was not covered by the New Zealand government. She had an invoice from the hospital and believed it was covered by the policy.
The client’s insurer maintained their view that they were entitled to decline the claim relying on the policy exclusion for loss arising directly or indirectly from pregnancy or childbirth.
After reviewing the policy, FSCL explained to Person B that the insurer was entitled to decline the claim.
Although the policy covered her medical expenses, before accepting the claim, the insurer was entitled to consider whether any policy exclusions applied. The policy wording was clear, and the description of her medical treatment referred to an injury occurring during childbirth.
However, her GP had referred her to the hospital physio four weeks after birth. It appeared to FSCL that it was the delay in receiving an appointment that pushed her medical expenses outside the six weeks following birth.
FSCL suggested to the client that she contact the hospital administrator again and ask them to reconsider the invoice on this basis.
Person B accepted FSCL’s view and discontinued her complaint about the insurer.
Insights for consumers
Although insurance policies usually state that the insurer will cover necessary and reasonable medical expenses, before accepting the claim, the insurer is entitled to consider whether any policy exclusions apply. An exclusion for loss arising directly or indirectly from pregnancy and childbirth is a standard policy exclusion.
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