The wording of insurance policies can be both confusing and daunting. Small print is sometimes taken for granted as being fair and reasonable. However this is not always the case! Take the following example, where the names have been changed but the facts are completely true.
A critical illness policy was designed to pay a lump sum to Susan in the event that she suffered a critical illness or an injury that prevented her from working. The wording of the policy issued by Help Me Insurance stated that the lump sum would be paid to Susan in the event that she suffered a ‘total and irreversible’ hearing loss. That seems quite clear; if Susan became deaf for whatever reason and her hearing could not be restored, then she would be entitled to the promised lump sum stated in the policy schedule.
Some 10 years later Susan suffered a total hearing loss and her physician confirmed that she was totally deaf and that her hearing could not be restored. Susan then made a claim under her policy, supported by the diagnosis of her specialist.
However Help Me Insurance were not entirely convinced that her hearing loss was ‘irreversible’ and took the view that further investigation was needed to establish if her deafness actually fell within the definition of the wording in the policy.
Help Me Insurance were relying on the availability of an implant that can be fitted to the inner ear that triggers the brain into thinking that it is capable of hearing. It does not restore a persons hearing to a level that most of us enjoy but rather creates a more mechanical sound that enables the patient to differentiate certain noises. Of course, if Susan had been making a claim for the loss of a limb then the likelihood is that the claim would have been paid without question, despite the fact that she may have been fitted with a prosthetic device.
Help Me Insurance were making the point that if Susan was to undergo the operation to have the implant inserted then she might have some sound restored and this may amount to a reversal of her apparent total hearing loss. This of course would then enable Help Me Insurance to avoid the policy on the basis that her condition did not satisfy the wording of the policy document.
The decision whether to pay Susan had therefore become a matter not so much for the doctors, but for the lawyers acting on behalf of the insurance company who were being called upon to advise whether Help Me Insurance was entitled to withhold payment on the basis that the implant may give rise to a level of hearing that entitled it to argue that the wording of the policy had not been satisfied.
After much discussion and heartache on the part of Susan, Help Me Insurance decided to honour the terms of the policy and accepted that she was totally and irreversibly deaf. However if the insurers had decided against paying her out then it may have meant that Susan would have been required to have the operation and if she failed to agree, then Help Me Insurance would have refused to pay her the lump sum until she complied with its request and only then would it have made a decision as whether the wording of the policy had been fully satisfied.
Richard Egglestone of Dutton Gregory Solicitors commented “The message must surely be to read all policy documents carefully and if in doubt take advice on the wording”. Richard is available on 01962 844333.