Snowbird Cruise Alert!

Fall 2010 CSANews Issue 76  |  Posted date : Sep 17, 2010.Back to list

We have all read our travel insurance policies, haven't we? Do we really understand what they say?

I want to point out the difference between reading, and really understanding, your travel insurance policy. The phrase below is right out of a real travel insurance policy that is sold by some cruise lines and travel agents. This is not an unusual clause. This is not a hard-to-understand clause. This is an innocuous clause that we would simply read and then just carry on with our "due diligence" reading of our travel medical insurance policy. I suggest that you read this clause at least twice. This clause is a nightmare!

Medical Expense and Emergency Assistance Benefits

We will pay this benefit, up to the amount on the Schedule for the following Covered Expenses incurred by you, subject to the following: 
  • 1) Covered Expenses will only be payable at the Usual and Customary level of payment; 
  • 2) benefits will be payable only for Covered Expenses resulting from a Sickness that first manifests itself or an Injury that occurs while on a Covered Cruise.
Although not the real problem, item 1) above is certainly a little vague. It says that they will pay at the "Usual and Customary" level of payment. Who decides that? Level of payment where? In Canada? In the U.S.? In Africa? Is it the insurance company's customary level of payment, or is it what a normal person pays when they get his or her bill? I know of one insurance company that used to decide what Medicare in the U.S. would pay for a stay in hospital and then send a cheque to the hospital for 75% of that amount. This might be as little as 10-20% of the actual total bill received and it certainly meant that the hospital would lose money on your care. The insurer hoped that the hospital's cumbersome bureaucracy would ignore further collection actions because the patient was a foreigner. The hospital would normally try to "balance bill" you, the patient, for the rest of the payment. Often, they would send aggressive bill collectors after you who would threaten and coerce; sometimes, they would just forget it. They do not forget it much anymore, due to the advances in technology and the ease of cross-border business collections.

A second company would send a note to the hospital saying that they would pay at 100% of the Medicare rate. They would send a fax asking for a signature to confirm this so that they could immediately authorize payment of the bill. Often, a simple billing clerk or an admittance staff person would simply sign this note (assuming that it was a normal process) and return it by fax. Just to be clear, I know of no hospital in the U.S. that would settle for this amount. A normal bill for a non-U.S. citizen will often be several times the value of the Medicare rate and that clerk who provided the approval signature would be reprimanded and perhaps terminated. Many Canadian insurance companies have a very bad reputation in many parts of the United States for these kinds of tactics.

Item 2) however, is the real disaster! It states that benefits will be paid for a "Sickness that first manifests itself" on your trip. Doesn't that sound so simple and reassuring? To most of us, this simply means that if we get sick on the trip, our "Covered Expenses" will be paid. NO! NO! NO! This clause really means that if you have ever had anything before, ever, you are NOT covered! You see, any treatment for a medical condition that you already have had, or have now, has already manifested itself and will not be a covered expense. Let's be even more clear. If you have any medical condition of any kind, you have NO coverage for that condition or anything related to that condition. If you are taking any drug, you are NOT covered for that condition or anything related to that condition. If you visited a doctor for something, you are NOT covered for that. If you had a symptom of some kind, you are NOT covered for that, even if you did not see a doctor. All these things were "first manifest" prior to your trip. Therefore - No Coverage!

I recently got a very aggressive letter from an unhappy gentleman. He was one of the very few people whom we could not accept as a client and we were unable to provide full coverage, due to his many intertwined medical conditions. He stated that he had been on two cruises and travelled to Mexico (I think it was Mexico), and that he was fully insured and it was cheaper than Medipac. Thank heavens he did not have a claim, as he would have had no coverage on any of these trips for any of his conditions. I will be writing to him with a similar answer to address the points he made.

My anger simmers when I read these clauses. I believe that they are meant to defraud the client who buys these policy types. Defraud is a very strong word and some of my compatriots in the insurance industry believe that I should not say such things because it detracts from the industry as a whole. That is not my intention, but why do they not stand up and say that these clauses are wrong and misleading to potential customers? Why do they continue to collect money on policies that will rarely respond to the most likely health emergency that their client will have? A simple warning on the front page of an application and on the policy would solve the problem. Something similar to this:

NO COVERAGE FOR ANY MEDICAL CONDITION YOU HAVE, OR HAVE EVER HAD;

NO COVERAGE PROVIDED IF YOU ARE TAKING A DRUG FOR A CONDITION; SEE CLAUSE xxxx FOR DETAILS.

Well, you might think that I was done after that rant, but there is one more little wording in the clause that will undo you. The misleading words are "up to the amount on the Schedule." It is not misleading in what it says, but for what it does not say. You would think that a person designing and writing a travel insurance policy would state the amount of any benefits in the place at which he or she is describing those benefits. Placing the benefit amounts in the above clause or on the front of the application and policy would be a great place to see them, if they are limited amounts. But no, you have to now go and find "The Schedule." I wonder if many people actually do find that schedule. Do you know what it says in this policy?
  • Medical Expenses up to $10,000
  • Emergency Evacuation Expenses up to $25,000
These amounts are of such little value in a real medical emergency that cruise operators should be embarrassed to even charge for this kind of travel insurance. These policies are not really medical insurance policies anyway, they are enhanced accident policies. Yes, they do cover sickness, but only that sickness which you "first manifest" on board. I don't think that anyone will catch asthma, high blood pressure, diabetes (or any of the other thousands of diseases that we have) on board the cruise ship; they already have them. Therefore, expenses related to any of these diseases are NOT covered. The only sickness exceptions which I could imagine that would apply are food poisoning and the Norwalk virus or a very, very unexpected heart attack. These would be covered, but only up to that miserly $10,000.

When travelling on a cruise or, indeed, anywhere, please take a proper travel medical insurance policy with you that you have read and totally understand. Make sure that it covers at least $1 million in medical expenses, too. If you are uncertain about the policy, in any way, I would call the toll-free telephone lines, provided by most cruise and tour companies, and tell them exactly what conditions you have and what medications you take. Ask them if you will be covered for a medical emergency and, if they say "Yes," request that they put that in writing, noting the conditions and drugs you indicated and any stability conditions that apply. Now you can enjoy that cruise.

Safe Travelling!