A complainant who disagreed with his insurer’s decision to reject a second claim he made under his trauma policy for a cancer diagnosis has lost his dispute. 

In the contract terms issued by Zurich, it was a condition that the complainant could not claim again for cancer if he agreed to exercise the option to reinstate his trauma policy. 

He had taken up the reinstatement option after receiving a trauma benefit of $465,395 in August 2011 for bowel cancer, but the second claim he made after being diagnosed with prostate cancer was rejected based on the exclusion that came with the reinstatement condition. 

The complainant says he understood the terms to mean he could claim again for cancer, just not for bowel cancer. 

However, the Australian Financial Complaints Authority (AFCA) ruled the insurer made the right decision to decline the second claim as the reinstated cover excludes all cancer. 

The original policy made it clear that a trauma benefit will be paid if a person suffers from one of the listed trauma conditions and one of the listed conditions is cancer, says AFCA. 

Zurich accepted the initial claim and paid the complainant the trauma benefit in 2011 and bowel cancer is not a listed trauma condition. 

AFCA says the original reinstatement option also makes it clear that when a claim is paid for the trauma condition “cancer”, another benefit for “cancer” or “carcinoma in situ” cannot be paid under the reinstated cover. 

“I accept that the complainant misunderstood his cover. However, that misunderstanding is not the insurer’s fault,” AFCA says. 

“The policy documents are sufficiently clear that once a benefit has been paid for cancer, another benefit for cancer will not be paid. 

“The insurer did not have an obligation to call the complainant to double check that he understood what he was covered for.” 

Click here for the ruling.