“They’re like a good gambler that never loses,” said Cyrus Derakhshan of Oakville, Ont. He is fighting RBC over a $16,500 claim denial for his 70-year-old mother. “For them it’s ‘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 health when they bought their policies.
“They hold all the cards in their hand. It’s a poker game, and I don’t think we are the winners,” said Jean Tetiuk, of Toronto, whose $12,000 claim was rejected by CIBC.
In each case, the medical emergencies abroad 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 bill she 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, because Peixoto 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 show she was tested for heart problems in 2011, after she had pain in her arm, but doctors found nothing significant. Because of those tests, CIBC said Peixoto should have answered yes to the heart condition question.
“I was never treated for a heart condition. I never had a heart condition. I’ve been tested and different things but I never had a problem before. And I still don’t 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 lung in Cape Cod, Mass., in 2012.
Unrelated minor health issues cited
Insurance investigators dug into her medical records and found a routine colonoscopy had detected a mild condition called diverticulosis, which caused no symptoms and needed no medication.
CIBC said that because of that, she should have said yes to 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 to eat a high-fibre diet and come back in another 10 years,” said Tetiuk, who has appealed the denial, with no success.
“If I’m not being treated and I am not taking prescription drugs, in my mind I don’t have a condition that I should be revealing. I don’t even think about it.”
Go Public asked CIBC for a response to these cases, but didn’t hear back before deadline.
Suing the big bank
Derakhshan is taking RBC to court over the claim denial for his mother, Roghi Derakhshan. He bought the policy for her, and when asked over the phone about his mom’s 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 Derakhshan’s mom has cardiac checkups and tried other medication briefly, that counts as treatment.
Her $16,5000 claim — for unrelated treatment of a bacterial lung infection in Geneva — 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,” said Derakhshan.
“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 mom’s 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 RBC’s insurance division, Martha Turnbull, told Go Public that even though Derakhshan didn’t intend to answer the question incorrectly, the claim denial is justified.
“It's a very regrettable decision,” said Turnbull who added that RBC 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 provincial regulators to force insurance companies to be more up front about what the medical 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 for treatment unrelated to any pre-existing conditions.
The industry association wouldn’t 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.
“There’s no onus on the insurance providers to first provide the consumer with the information they need to make an accurate response. And that’s what’s got to change.”
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