Medical history could unravel insurance claims in new ways

Clients who forget to disclose even minor details of their medical past face having their insurance cover cancelled under new laws, a lawyer warns.  

Changes to insurance law, which kicked in last week, make it possible for insurers to refuse to cover clients’ costs, even if they have retained their policy for three years, Slater & Gordon Practice Group Leader for Insurance, Andrew Weinmann, said.  

Previously, an insurer could only refuse cover if the client had held the policy for less than three years and if the insurer would have not taken on the client in the first place.  

However, the new laws allow insurers to veto life, disability, income protection and total and permanent disablement insurance without the same conditions, Weinmann said.  

“So, the person with the old ankle injury could lose their cover, even if they were hit by a bus, or got cancer,” he said.  

“I see plenty of cases where insurers try to cancel people’s insurance cover after they make a claim, and they often complain about not being told about minor and passing physical injuries or illnesses, and especially minor episodes of depression, stress and anxiety.” 

Weinmann said advisers need to ensure clients thoroughly detail their medical history on all the relevant forms to avoid policy losses.  

“The most important thing is to give honest and detailed answers to any questions the insurer asks in the application process,” he said. “”If your adviser is filling out the form for you, check their answers carefully before you sign it.”