Take note of policy terms that don’t cover some medical conditions

Break a leg is a common way to wish others “good luck” but it proved to be a sore point for a man here after being denied insurance when he suffered a fracture – in the wrong leg.

Such claims would usually be approved with no fuss by most private insurers, especially if the injury was caused in an accident. But this man’s policy had a specific no-coverage term for his right leg as he had had knee replacement surgery.

As luck would have it, that was the right leg he broke so the insurer did not reimburse his claim.

This case was featured in the annual report of the Financial Industry Disputes Resolution Centre (Fidrec) to highlight the importance of knowing the terms of your insurance policies.

Exclusion clauses in policies

The man’s knee replacement surgery became an issue when he bought a medical insurance policy that included a term excluding any treatment for his right leg.

When he broke this leg in a road accident, he argued that he should be covered as the injury was unrelated to the knee surgery. But the insurer maintained that the policy excluded any treatment to the right leg, regardless of the reason.

When the case ended up at Fidrec, the adjudicator found that the exclusion clause was clear and supported the insurer’s case that any treatment to the man’s right leg was not covered. So the man’s claim was dismissed.

Points to note: Special terms or exclusion clauses can vary from insurer to insurer. When applying for a policy, you can accept or reject these terms. You can also try to negotiate or appeal against the special term before signing.

Some insurers are flexible enough to offer standard coverage even though you had past surgeries if their panel doctors certify that you have fully recovered and are in good health.

Overseas treatment

If you are going overseas, buy travel insurance that covers foreign hospitalisation costs. Don’t rely on your Singapore medical policy because it is meant for treatment by hospitals here.

While some insurers may still allow you to claim for “emergency” treatment, you could only recover amounts that are proportionate to similar treatment here.

 A Malaysian who is a permanent resident here bought a hospitalisation plan even though he spent half his time in Malaysia due to family and work commitments.

He was hurt in an incident here but chose to be treated in a hospital in Malaysia. He only disclosed his living arrangements to the insurer when he filed for a claim.

The Insurer rejected his claim because he failed to meet the residency clause in his policy, which stated that a policyholder could not live outside Singapore for more than 180 days in a policy year.

All customers were told about the new clause in letters that stated that the term would be included in all policies from 2020. While the man received the letter, he did not notice the residency clause as it was one of many changes made to the policy in 2020.

He said that had the insurer highlighted the clause, he would not have continued with the policy as it would not cover him.

When the parties went to Fidrec for mediation, the insurer explained that the residency clause was a standard term in the industry but it agreed to make a goodwill refund of premiums the customer paid since 2020 when the policy no longer covered him.

Points to note: Many insurance contracts have clauses that allow insurers to amend various terms, including varying premiums and adjusting the scope and coverage of the policy.

While insurers must inform their customers of these changes, you should do your part by reading all notices and clarify any changes that you are unsure of. You should also keep your contact information up to date to avoid missing any crucial notifications.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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