Over the past couple of weeks I’ve noticed several articles concerning how travel insurance responds to claims caused by mental disorders. One article mentioned a husband and wife who were advised to cancel their trip because of the possibility of their son having a reaction to a change of medication for his psychiatric condition. Their trip cancellation claim was declined.
The travelers were upset that their claim was denied and felt that travel insurance plans might discriminate against people with mental disorders. Their son’s psychiatrist even indicated that discriminating against people with mental disorders may even be illegal in light of mental health parity laws.
Why was this claim denied? The basic reason the travelers cancelled their trip was due to an “anticipated” reaction to the medication rather than an actual reaction. This might be cutting hairs however, trip cancellation/interruption insurance only provides coverage for trip investment losses if an actual covered reason occurs which means that a sickness or injury which is treated by a physician and which forces a traveler to cancel or interrupt their trip is usually a covered reason. In this case there was no reaction and therefore no medical condition, just the threat of one and therefore no coverage.
What would have happened if there was a reaction to the medication? One of two things might have happened. If it was a medical reaction that required treatment and care by a physician than that would probably be covered as a health reason however, if it was a worsening of the mental disorder or the manifestation of a new mental disorder than that would have been excluded from coverage.
Why would it have been excluded if it were a mental disorder? Because travel insurance policies generally have an exclusion which removes coverage for losses caused by a “mental disorder”. The following is a common exclusion found in travel policies:
“mental, nervous, or psychological disorders”with some companies adding the clause “unless hospitalized”.
Is this illegal in light of mental health parity laws? The answer is not clear. Mental health parity laws generally are limited to group health insurance plans and might not apply to travel insurance plans. The mental health disorder exclusion is a relatively new provision that has snuck into travel policies within the past decade along with exclusions for use of alcohol or drug(which will be the subject of another article).
The bigger question concerns fairness – is it fair? Bottom line is no, it isn’t fair to treat mental health issues differently than physical issues. It’s time for travel insurance to move forward.