Every year the Financial Ombudsman Service deals
with a relatively small but steady number of complaints involving personal
accident insurance. Policies of this type generally offer a defined level of
benefit where a policyholder dies or suffers serious injury as a result of an
accident.
Most disputes between insurer and customer
concern:
- Whether or not the policy covers a specific
injury, or the circumstances in which it was sustained
- Whether an accident was the sole cause of an
injury or whether a pre-existing condition contributed to the problem
- The
level of benefit payable
Case study
Insurer refuses to pay personal accident claim
because of an underlying medical condition
Mr D made a claim under his personal accident
policy for total and permanent loss of use of his left leg. He said his
disability had come about as a result of a fall, when he had slipped on some
water on his bathroom floor.
After examining the medical evidence, including a
statement from Mr D’s GP that functional loss of use of the left foot is
effectively 100%, the insurer offered to pay Mr D for total and permanent loss
of use of one foot.
Mr D thought he should have been offered the
significantly larger sum that was payable for the loss of an entire leg. He
therefore rejected the insurer’s offer and complained that it had failed to
assess his claim correctly.
The insurer then paid for an independent medical
report. The specialist who examined Mr D and produced this report concluded
that Mr D’s fall had not caused any significant new injury to his left foot.
The specialist noted that this foot had been
badly injured some years earlier and that Mr D’s use of the foot had continued
to be limited ever since, even though he had undergone a considerable amount of
treatment.
The specialist conceded that Mr D’s fall might
have aggravated the existing problem. However, he said that if this had
happened, any effects attributable solely to the fall would only have lasted a
few weeks.
The insurer then told Mr D it was rejecting his
claim altogether, on the grounds that there was a ‘pre-accident history of
injury’ to his left foot. Unhappy with this, Mr D brought his complaint to us.
The complaint was not upheld as after looking
carefully at all the evidence, the ombudsman concluded that the accident had
not caused the problem for which Mr D was claiming on his policy.There was
clear, independent medical evidence showing that Mr D had a significant history
of treatment to his left foot – and that this treatment pre-dated both the
events relating to his claim and the start date of his policy.
Case study
Dispute over whether consumer’s injury happened
accidentally as required by policy terms
Mr A had insurance cover under his employer’s
group policy for, among other things, accidental bodily injury. He put in a
claim under this section of the policy for paraplegia (paralysis of the lower
part of the body).
He said the accident giving rise to his
disability had occurred while he was playing football with his local amateur
team. He had been perfectly fit and well at the start of the match. However,
during the match he had suddenly become aware of acute pain between his
shoulder blades. He had subsequently been admitted to hospital and was
eventually diagnosed with paraplegia.
The insurer turned down Mr A’s claim. It said the
medical report provided by Mr A’s doctor stated that there was no evidence that
the disability had been caused by any accidental bodily injury either during
the football match or otherwise. The medical report said that the paralysis had
resulted from a ‘previously existing but undetected congenital abnormality’ (in
other words, something that had been present when he was born).
Mr A complained that the insurer had treated him
unfairly. He said he did not see how it could be considered anything but an
accident that he had started a game of football in perfect health and become
paralysed for life by the end of it.
In response, the insurer told him that the policy
defined accidental bodily injury as an injury to the body caused by a sudden
act and not by any gradual cause or degenerative process.
The insurer said that the intentional movements
he would have made while playing football could not reasonably be said to
‘constitute or cause accidental bodily injuries as defined in the policy.
The complaint was upheld against the insurer.The
terms and conditions of many personal accident policies state that, for benefit
to be paid, the accidental bodily injury needs to have come about as a result
of something that was not only a sudden, unexpected and chance event, but that
was also external, violent and visible.However, Mr A’s policy required only
that the accidental bodily injury was caused by a sudden event.There had been
no accident in the ordinary, everyday sense (he had not tripped, slipped etc).
But there was no dispute about the fact that – before the football game – Mr A
had been fit and well. He had not been in any pain or discomfort and had been
quite unaware of the congenital abnormality that was subsequently discovered.
The paralysis had come about after a sudden event
during the game. So the ombudsman concluded that Mr A had suffered an
accidental bodily injury, as defined by the policy, and he therefore had a
valid claim for paraplegia benefit under the policy. The insurer had to pay the
claimof over £100,000.
If the insurer had been less slipshod and vague in the policy wording, it would not
have had to pay.
