What should you do if your travel insurance claim gets REJECTED

What is travel insurance

Over the past years, travel insurance has become essential especially for Malaysians travelling abroad. Travel insurance is a policy that covers unforeseen losses incurred while travelling. If you travel either on holiday or business, you may purchase the travel insurance policy from any of the local insurance providers. Travel policies offered for both single and annual trips to any domestic or foreign destinations. You are required to pay a fixed premium for the insurance coverage.

Travel insurance covers a wide range of benefits from accidents to travel inconveniences occurred during your travel period such as: 

  1. delayed or loss of luggage/personal belongings
  2. medical expenses
  3. emergency trip cancellation/curtailment 


Covid-19 Pandemic

The on-going Covid-19 Pandemic may have halted cross-bordering travels momentarily and as a result, travel plans were either curtailed, postponed, or cancelled. 

Your travel policy/certificate may offer some coverage for incidents caused by Covid-19, but it is subject to the policy/certificate terms and conditions provided by your respective insurance provider. 


How to make a travel insurance claim? 

If you have experienced any of the above incidents and wish to seek reimbursement, you must file a claim with your insurance company. You need to provide evidence and relevant documents related to the incident such as a police report, medical report, payment receipts, travel dockets etc. 

The insurance provider will validate your claim and compensate you according to the policy coverage that you have purchased. 


What should you do if your travel insurance claim gets rejected?

Not all claims submitted are eligible to be reimbursed by the insurance provider.  An insurance policy is a contract between you and the insurance company, the protection provided is subject to terms and conditions stated therein. 

Among the top reasons for the insurance company to deny your travel claim are:

  1. Claim exclusionsnot all incidents are covered under your travel insurance policy, for instance, accidents caused by risky or dangerous sports are excluded
  2. Pre-Existing Medical Conditionif the cancellation or curtailment is due to a pre-existing medical condition, the claim will be rejected
  3. Non- compliance of terms and conditionssuch as the minimum hours of a delay to qualify for a claim
  4. Government’s travel advisoryyou travelled to places where the authority recommended against travelling to
  5. Fraudulent claim - the insurer suspects fraud in the claim submission
  6. Covered eventsonly certain events trigger the benefits under the travel policy. For example, Travel Delay Benefit will trigger only if any one or more of the following events had caused the delay:
  1. natural disaster
  2. inclement weather conditions
  3. strike and industrial action
  4. mechanical breakdown of common carrier
  5. grounding of common carrier as a result of mechanical or structural defect


Travel disputes handled at OFS 

OFS handled 98 travel insurance related disputes in 2019. Among the common complaints received are:

  1. loss of deposit or cancellation 
  2. loss of luggage/baggage and personal effects
  3. travel delay
  4. travel curtailment
  5. travel misconnection
  6. medical and other expenses


As of 30 June 2020, we received 79 cases with majority related to travel cancellation and curtailment due to Covid-19 pandemic.   

OFS observed that most disputes arose because policyholders do not read and understand the travel insurance policy terms and conditions. Many assume that all unforeseen expenses incurred during travels are automatically covered by the travel policy.

If you feel that your claim is unreasonably rejected by the insurance provider, you are entitled to appeal. If you are still dissatisfied with the final decision of the insurance provider, you may approach the OMBUDSMAN FOR FINANCIAL SERVICES (OFS).


How OFS resolves your dispute? 

Once you have received the final decision letter from your insurance provider, you may lodge a complaint with OFS. If your dispute is within OFS’ jurisdiction, we will proceed to register the complaint. We will gather all the pertinent information and documents related to your case and begin our investigation. 

We look at each case independently and impartially and we do not take sides. OFS weighs all the facts and evidences provided by the eligible complainant and the insurance provider. We also take into account what is fair and reasonable in resolving the dispute.


Travel Cancellation

Ms Alina (not her real name) had to cancel her trip as she was admitted to the hospital for her cancer treatment. She made a claim with her insurance company for reimbursement of cost of the irrecoverable deposits or charges she paid in advance or contracted to be paid. Unfortunately, her claim was rejected on the basis that the trip cancellation was due to a “Pre-existing Condition” which is excluded under said insurance policy. 

Ms Alina was not satisfied with the insurer’s final decision and filed a dispute with OFS. OFS’ findings revealed that Ms Alina was first diagnosed with cancer 19 years ago. Her last test done in 2018 showed no relapse. 

The policy definition of Pre-existing Condition is stipulated as follows: 

Disabilities that the Insured Person has reasonable knowledge of in the twelve (12) months prior to the inception Period of Insurance. The conditions are:

  1. the Insured person had received or is receiving treatment;
  2. medical advice, diagnosis, care or treatment has been recommended;
  3. clear and distinct symptoms are or were evident; or
  4. its evidence would have been apparent to a reasonable person in the circumstances.

OFS highlighted to the insurance company that Ms Alina’s condition is stable since 2018 and there is no documentary evidence indicating that she had met the above conditions within the twelve (12) months.

The insurance company revised their decision and made a settlement offer to Ms Alina.  Ms Alina accepted the offer, and the dispute was amicably resolved. 

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