MICHAEL J. RANKIN reports a recent case dealing with trip cancellation insurance coverage and the policy’s exclusion of coverage for a pre-existing medical condition.
Plaintiff purchased a trip to St. Lucia for himself and his family. On May 19, 2014, two days before his scheduled departure, Plaintiff purchased trip cancellation coverage (the “Policy”) from the Defendant.
On the Policy’s effective date, May 20, 2014, Plaintiff sought treatment from his dentist and was diagnosed with acute pericoronitis (inflammation of the gum tissue surrounding the crown portion of a partially erupted tooth). Plaintiff was advised by his dentist not to travel and thus cancelled his trip to St. Lucia. He also filed a claim for reimbursement under the Policy. Defendant denied Plaintiff’s claim resulting in Plaintiff filing a lawsuit for breach of contract against the Defendant.
After a bench trial, the judge dismissed Plaintiff’s Complaint. The judge found the Policy contained an exclusion for a pre-existing medical condition, which the Policy defined as a medical condition that manifested itself 180 days immediately preceding the Policy’s effective date, including the effective date of the Policy. Because Plaintiff’s illness occurred on the Policy’s effective date, the judge found that it constituted a “pre-existing medical condition” under the terms of the Policy and was thus excluded from coverage.
The Appellate Division affirmed the trial judge’s ruling finding that the Plaintiff’s illness fell within the clear and unambiguous language of the Policy. The Appellate Division also found that inclusion of the Policy’s effective date within the definition of “pre-existing medical condition” as a deterrent for insurance fraud was not unreasonable or at odds with the reasonable expectations of an insured that it should, as a matter of law, invalidate the provision.
This case is a reminder on how important it is to confirm what an insurance policy covers and its exclusions before making a determination to purchase the policy. A careful reading of the policy, including its exclusions and defined terms, are needed.
Please contact Michael J. Rankin if you have any questions or need any assistance in connection with this subject.