Accounting for Law

Insurer to pay $180G medical tab after exclusion read narrowly

A judge’s order that an insurance company pick up the $180,000 tab for a man’s foreign medical costs shows courts’ willingness to read exclusionary clauses narrowly, says Vancouver insurance lawyer Sean Lerner.

Lerner, principal of Lerner Law Corporation, tells that because insurance contracts come in standard form, courts generally give the benefit of any doubt in their interpretation to consumers.

“The rationale is that the policyholder gets no say over what the words in the contract are,” he says. “Exclusions take away from the coverage that the policy provides, and this case is an example of the court favouring the interpretation that keeps that to a minimum.”

The case had its roots in March 2011, when the man spoke to his doctors about his heart condition ahead of a trip to Mexico, and received clearance to go.

But after experiencing chest pains, he left Mexico early, only to require emergency treatment during the return trip, when he was taken to hospital by ambulance during a scheduled stop in Seattle.

Medics then transferred him to a cardiac intensive care unit, where he underwent emergency coronary artery bypass surgery and spent five days in hospital before returning home to Canada.

His group insurance plan through work covered out-of-Canada emergency travel medical care expenses, but the insurer denied coverage, claiming that it fell under an exclusion in the policy, and leaving the man facing a $180,000 bill.

The provision invalidated coverage for conditions where, prior to departure, “medical evidence suggests a reasonable expectation that treatment or hospitalization could be required while travelling.”

Months before the trip, the man’s cardiologist had diagnosed him with stable angina and given him nitroglycerin tablets to take in the event he experienced chest pain. If those failed to work, he was told to go to emergency.

Another cardiologist called by the insurer to give expert evidence opined that the man’s medical records suggested he had progressive or crescendo angina, and that it was reasonable to expect treatment during his travels. 

However, the judge found that the plaintiff’s “prudent” consultations with his doctors ahead of the trip, and their actions convinced her that “his condition was considered to be stable and that his proposed travel would not pose any increased risks to his health.”

“I am satisfied that the plaintiff’s trip was undertaken in circumstances in which he and his treating physicians were aware of his pre-travel medical conditions, aware of the medical information, tests and diagnoses to that date (i.e. the available 'medical evidence'), and that they reasonably concluded the proposed trip posed no reasonable expectations of risk to his health,” she wrote. “It follows that the pre-travel medical evidence did not suggest a ‘reasonable expectation that treatment or hospitalization could be required while travelling.’”

Although the judge found the language of the policy was “clear and unambiguous,” doing away with any need for interpretation, Lerner, who is not involved in the case and comments generally, says the result suggests otherwise, given the wording of the exclusion. 

“The word ‘could’ in the exclusion is a broad word — it connotes possibilities rather than likelihoods,” Lerner says. “There was certainly a medical condition that the doctors were watching and concerned about. There were also directions from the specialist to go to emergency if the medication stopped providing relief. Was this not evidence that reasonably suggested the man could require treatment?

“It seems clear that the judge was interpreting the language — reigning in the broad scope of a verb like 'could.' It’s not stated in her reasons but is suggested in the result,” he adds.

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