Four ways you could be caught out by your travel insurance policy

Murphy's Insurance Law goes like this. Wife is about to renew travel insurance policy, husband simultaneously puts his back out.

While he's staggering about booking a physio appointment between pain spasms, I'm on the Southern Cross website wondering whether to own up to it on the new policy.

Half the world's middle-aged men have dodgy backs. It might be gone by tomorrow. Do they really care if he gets on a jumbo jet with a couple of voltaren for company?

Don't mess with the pre-existing clause

If in doubt, declare it. The Insurance and Financial Services Ombudsman has issued a timely reminder for those planning a winter escape. "Claims declined due to pre-existing medical conditions are a common complaint".

The ombudsman goes on to say "most often, you will not be covered for any pre-existing conditions, unless the insurer has accepted them in writing and charged an extra premium".

Ouch, I wonder what this bad back is going to cost us? I enter the Southern Cross website with trepidation. There's a blank box where you type each medical condition. "Back pain" pops up with an onslaught of nine questions. They seem most concerned about people awaiting surgery, taking morphine, what they weigh and their height. They're sniffing out those over 18 stone, which seems quite generous. He'll need to eat many pork pies in the UK before he'll tip the Southern Cross scales.

After the quick Q&A, his back and a couple of other middle-aged barnacles are covered for $75 extra premium. Add on my collection of barnacles and it was another $75. The blank box on the website actually opens up into a medical dictionary. Everything you can think of is hiding in there.

The only thing I've ever fooled that box with was a clavicle. I broke mine last year and the box wasn't very interested in which particular bone it was. I rang the helpdesk over that one.

Sometimes the scary blank box gives a nice surprise. Many ailments will qualify as a "controlled condition" and the price won't be bumped up. This is because they've been stable for a period of time. Things like asthma, epilepsy, hay fever and cataracts are listed. High cholesterol also makes it, as long as you don't have heart disease or diabetes.

But beware. The ombudsman's suitcase contains a number of examples where travellers have tripped up on pre-existing conditions. Here are a few that have caught unsuspecting Kiwis:

1. Don't ignore stable symptom-free conditions: A woman was hospitalised prior to a trip to Australia and had to cancel her holiday. She was diagnosed years earlier with kidney stones, but never had any symptoms so didn't declare them. The stones moved causing ureteric calculus. Don't bother googling that, you'll just get directions to some impossibly named junctions downstairs.

End result: Claim declined. The lesson: Being symptom-free doesn't cut it.

2. Be careful if you've had tests: Prior to taking out a policy, a woman had an abnormal liver test and a positive Bence-Jones protein test. The travel policy was taken out after the tests, but prior to any diagnosis. A form of bone marrow cancer caused her trip to be cancelled and her husband returned early when she went to hospital.

End result: Claim declined. The lesson: Not having a diagnosis doesn't cut it. Symptoms and tests have to be declared.

3. Old symptoms can trip you up: A couple travelling with their son had to get treatment overseas for him after a rare infectious disease presented. The symptoms occurred two years earlier but he had never been tested or diagnosed with anything suspicious in New Zealand. The insurer sought the opinion of a specialist who confirmed these old symptoms were associated with the disease, so it pre-existed the policy.

End result: Claim declined. The lesson: Medical professionals failing to diagnose something rare doesn't mean you didn't have it.

4. Other people's symptoms and conditions can be costly: A trip to Noumea was cancelled when a family member died.

Unfortunately the death was caused by lymphoma and this condition was in existence before the policy was taken out.

End result: Claim declined. The lesson: Understand the risks if you travel when a family member has a serious condition.

Janine Starks is a financial commentator with expertise in banking, personal finance and funds management. Opinions in this column represent her personal views. They are general in nature and are not a recommendation, opinion or guidance to any individuals in relation to acquiring or disposing of a financial product. Readers should not rely on these opinions and should always seek specific independent financial advice appropriate to their own individual circumstances.