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."
