Travel insurance doesn't pay for these bank customers

Three customers who bought travel insurance from Canadian banks are outraged after being left with largeforeign medical bills.

Theyre like a good gambler that never loses, said Cyrus Derakhshan of Oakville, Ont. Heis fighting RBC overa $16,500 claim denial for his 70-year-old mother. For them its Heads I win, tails you lose.

The banks refused to pay in these cases, based on how the customers answered broad-ranging questions about their healthwhen they bought their policies.

They hold all the cards in their hand. Its a poker game,and I dont think we are the winners, said Jean Tetiuk, of Toronto, whose $12,000 claim was rejected by CIBC.

In each case, the medical emergenciesabroad had nothing to do with any pre-existing conditions they were asked about.

Paid extra, claim still denied

Another CIBC travel insurance customer, Carmen Peixoto of Chilliwack, B.C., fights back tears when she talks about the $10,000 medical billshe is stuck with.

I worked too hard,all my life. And this bank is taking advantage of me? I am really upset. Really, really upset.

The 69-year-old has high blood pressure. She paid CIBC an extra $100 premium to make sure her travel insurance would cover her for that. When her blood pressure soared, on her trip last year, she was taken by ambulance to a Geneva hospital.

CIBC later refused to pay, becausePeixoto filled out a CIBC questionnaire sent to her after she returned from her trip answering that she had not been treated for a heart condition. Before buying the policy, she had only answered health questions over the phone.

Records showshe wastested for heart problems in 2011, after she had pain in her arm, but doctors found nothing significant. Because of those tests, CIBC saidPeixoto should have answered yesto the heart condition question.

I was never treated for a heart condition. I never had a heart condition. Ive been tested and different things but I never had a problem before. And I still dont have a heart problem, said Peixoto.

She is also upset because CIBC was asking her health questions after the fact, while at the same time adjudicating her claim.

I was tricked,because they never had any intention of paying this claim. And I find that totally incredible.

Tetiuk, another senior, is also furious at CIBC for refusing to pay her $12,000 US medical bill, after she was treated for a blood clot in her lungin Cape Cod, Mass., in 2012.

Unrelatedminor health issues cited

Insurance investigators dug into her medical records and found a routine colonoscopyhad detected a mild condition called diverticulosis, which caused no symptoms and needed no medication.

CIBC said thatbecause of that, she should have said yesto its question about whether she had a bowel disease. It also said she should have disclosed that she has ostopenia, or low bone density.

Everyone over 60 has this condition, for sure. And diverticulosis was determined when I had a colonoscopy and I was told toeat a high-fibre diet and come back in another 10 years, said Tetiuk, who has appealed the denial,with no success.

If Im not being treated and I am not taking prescription drugs, in my mind I dont have a condition that I should be revealing.I dont even think about it.

Go Public asked CIBC for a response to these cases, but didnt hear back before deadline.

Suing the big bank

Derakhshanis taking RBC to court over theclaim denial for his mother,Roghi Derakhshan.He bought the policy for her, and when asked over the phone about his moms medical history, he said no to a question about whether she had heart problems.

RBC Insurance gives you the illusion that they are asking you questions in layman terms and that these are just general questions, said Derakhshan.

His mom has atrial fibrillation heart palpitations with no adverse effects and, like many older people, takes baby Aspirin to prevent problems.

Derakhshan said he answered no to the question, because RBC's questionnaire said a heart condition "does not include extra beats or palpitations, for which you have not taken medication or received treatment.

RBC later said that because Derakhshans mom hascardiac checkups and tried other medication briefly, that counts as treatment.

Her $16,500 claim for unrelated treatment of a bacterial lung infection in Zurich has been denied, citing misrepresentation of her medical history.

My mom was already paying close to $400 for one month of insurance. She was spending thousands of dollars to go on this European trip, saidDerakhshan.

Do you think that for another measly $100 of insurance I would have any reason to misrepresent or lie on her behalf?

Derakhshan is suing RBC for $25,000 in small claims court.

My objective is bigger than my moms case. I want to stand up for people who have gone through the same thing,and my final goal is to change policy.

RBC justifies denial

The head of RBCs insurance division, Martha Turnbull, told Go Public that even though Derakhshan didnt intend to answer the question incorrectly, the claim denial is justified.

It's a very regrettable decision, said Turnbull who added thatRBC denies two per cent of claims, for all types of insurance it sells.

Unfortunately, we need to make consistent decisions for all clients. Denying a claim is the most difficult decision we make in the claims department. We take our responsibility and accountability to our clients very seriously."

She also said RBC will fight this case in court.

We will not be settling it, said Turnbull. We are making sure that we treat every client with the same respect and care and that if the clients answer the questionnaire correctly they pay the correct premium, they're not in turn subsidizing people who don't answer the questions correctly.

Insurers hold 'legal weapon'

Insurance broker Bruce Cappon is lobbying for provincialregulators to force insurance companies to be more up front about what themedical questions really mean.

The way the system is rigged right now is that insurers have a legal weapon. The misrepresentation clause is a legal weapon, said Cappon.

I find it very unfair that you are asking these people to fight back when the remedies would be very simple, just to add a few changes to the regulations.

He also thinks it should be illegal for insurers to refuse to pay fortreatment unrelated to any pre-existing conditions.

The industry association wouldnt say what percentage of travel medical claims are denied for misrepresentation, but that it is trying to educate consumers on the pitfalls.

Know your health and consult a health-care provider if you have any questions, said a spokesperson for the Travel Health Insurance Association of Canada.

Cappon advises people to go as far as checking their medical records before buying policies, because that is what the insurance companies look at.

Theres no onus on the insurance providers to first providethe consumer with the information they need to make an accurate response. And thats whats got to change.

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