Claim Denied! Summary of 7 Cases



At age 60 in late January, 2004, Frank Falvo purchased a 30-day travel insurance policy at the local Allstate office in Thunder Bay, Ontario. A few days later, he felt chest pain. So his doctor prescribed a third medication for high blood pressure. Nevertheless, Falvo’s agent assured him he would still be covered. He later underwent a stress test, which showed no problems. Despite receiving a green light to travel, and having a week without symptoms before he left, he felt pain again in Florida. He went to a hospital, and received and angioplasty operation at a cost of more than $53,765.04. Allstate denied his claim, but a judge of the Ontario Superior Court of Justice ruled that none of the policy exclusions it cited applied to Falvo, including a limit of coverage for 15 days. Falvo had come home early on the 14th day. The Court of Appeal for Ontario later upheld that ruling unanimously.

Lillian Rosenblat of Manitoba did not qualify for low-premium versions of the Reliable Life Insurance Co. policies she purchased at age 84 for two trips to the United States. So when she fell and incurred $27,723 in medical expenses on one of those trips, Reliable refused to pay. A judge faulted Rosenblat for failing to reveal she had been examined again for her ongoing heart problems, and had been prescribed an additional medication, within 12 months of her planned trip. However, in 2003, the Appeal Court of Manitoba found an insurance broker acting as her agent was the one at fault for selling Rosenblat a “super-preferred” policy when he should have realized she would not qualify. He had not read the policy or application before going to see her. The court ordered the broker to pay her medical expenses, plus legal expenses, for the two court cases.

The late Marcella M. Bird of Lindsay, Ontario, fell ill due to her cirrhosis of the liver two months after she and her husband arrived at a home they had rented for the winter in Lady Lake, Florida. She died in hospital a few days later. Canada Life denied a claim for $99,276.65 (US) for medical treatment and $696.58 (CDN) for a plane ticket for her son to visit her. Canada Life attempted to rely on a policy exclusion referring to abuse of alcohol, but a judge of the Ontario Supreme Court, ruled that would not apply. She had been advised to stop drinking in 1994, her medical condition had been stable in the previous year, and her husband testified she had not abused alcohol in Florida.

Sandra Turpin of British Columbia had pain in her abdomen during a trip to Disneyland with her family. She saw a doctor at a walk-in clinic, and later went to hospital, where she spent five days getting tests and treatment. Her claim for $27,170.81 in expenses was denied on the grounds she had also seen a doctor about abdominal pain shortly before the trip. After the trip, she needed to have her appendix removed. A judge agreed in a 2011 ruling that Turpic was right to expect and receive compensation, although she had never read her insurance policy. But the BC Court of Appeal ruled later that the policy’s 90-day exclusion for pre-existing conditions was reasonable and valid.

Kenneth Roy Kulak of British Columbia was in his 70s when he collided with a car while cycling in Arizona in 2008. Hospital and air ambulance bills came to $185,140. Lawyers for Reliable Life Insurance Co. argued successfully that Kulak had reported his health status inaccurately when using a scoring system on the application for coverage. He left out any mention of his heart condition, and paid a premium of $903 instead of the $2,260 he should have paid. A judge ruled his contract was void, and he was ineligible for any coverage under that policy.

Bonnie Margaret Ouitmet died in 2002 of an infection in Denver, Colorado. She was 52. Before leaving from Vancouver, BC, she had paid $14 for $2 million of travel insurance coverage, declaring “I am in good health and know of no reason to seek medical attention.”  A judge initially ruled that Co-operators Life Insurance Co. should pay for her $115,000 (US) in medical expenses. But, in 2007, the Court of Appeal for British Columbia ruled unanimously that she had lied on the application. “She had a problem with alcohol,” the judges noted. She admitted in Denver she regularly drank two pints of alcohol a day, and the night before she bought insurance was found unconscious at home, in respiratory distress after taking a prescription narcotic. She was revived in hospital, but she refused to be admitted for further investigation.

Stephen Ramsay of British Columbia injured his head in the parking lot of a bar in Fremont, California, in 1992, but his claim for $25,190.18 in medical expenses was denied. So Ramsey sued and, in 1996, a judge ordered Voyageur to pay on the grounds that Ramsay was injured in a separate, identifiable event after he had stopped drinking excessively in the bar. That ruling was overturned two years later. The Court of Appeal for BC noted there was no evidence of obstacles or hazards in the parking lot, and “the only reasonable inference to draw from the evidence” was his acute intoxication, as noted by police and the hospital.

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