A recent Court of Appeal ruling has clarified how insurers can apply ‘pre-existing medical condition’ exclusions to travel insurance claims.
In Dolores Mizzi vs. Atlas Insurance PCC Ltd (Appeal No. 35/2024 LM), the court ruled that an insurer cannot broadly interpret such clauses to reject claims where an accident—not an underlying condition—was the primary cause of cancellation.
Case background
Dolores Mizzi had purchased a travel insurance policy from Atlas Insurance PCC Ltd when booking a trip through Britannia Services Ltd. The day before her departure, she injured her leg on a church bench, resulting in excessive bleeding exacerbated by her condition of varicose veins. Doctors at Mater Dei Hospital advised her not to travel, leading her to cancel her trip and file a claim for €1,029.
Atlas Insurance refused the claim, arguing that Mizzi’s varicose veins constituted a ‘pre-existing medical condition’ excluded under the policy. This prompted a legal dispute over whether the exclusion had been applied fairly.
The arbiter’s decision
The Arbiter for Financial Services, deciding the case at first instance, ruled in Mizzi’s favour, ruling that the insurer must pay the claim with 4.5% interest and legal costs. The decision was based on the fact that Mizzi’s claim arose from an accidental injury rather than an existing medical condition.
While her varicose veins may have contributed to the bleeding, the direct cause of the cancellation was the accident itself. Furthermore, Mizzi had not sought medical consultation for varicose veins within 12 months of purchasing the policy, a key criterion for the exclusion to apply.
Insurance company's appeal
Atlas Insurance contested the decision, maintaining that Mizzi’s varicose veins increased her risk of complications and therefore fell under the policy’s exclusions. The company emphasized her documented medical history and argued that the policy explicitly barred claims linked to pre-existing conditions within the prior 12 months.
Court of Appeal’s ruling
The Court of Appeal rejected Atlas Insurance’s arguments and upheld the arbiter’s decision. The ruling confirmed that Mizzi’s injury—not her varicose veins—was the decisive factor in her trip cancellation. The court underlined the insurer’s broad interpretation of the exclusion, holding that an underlying condition exacerbating an injury does not automatically disqualify a claim.
It also highlighted the insurer’s failure to clearly communicate the policy’s exclusions, raising concerns about transparency.
This decision carries significant consequences for travel insurance policies. It restricts the way insurers may apply pre-existing condition exclusions, ensuring they cannot be used to deny claims primarily caused by accidents.
The case also underscores the need for clearer policy wording and greater transparency in insurance sales, particularly where sales occur through intermediaries.
The court noted that such intermediaries might downplay exclusions to avoid deterring potential travellers, a practice that it noted could warrant regulatory scrutiny.
The Court of Appeal’s ruling makes it clear that insurers cannot use vague or overly broad exclusions to reject legitimate claims. The decision reinforces the principle that policyholders should not be penalized for unclear contract terms or unfair interpretations of medical exclusions.
Dr Arthur Azzopardi, is managing partner, and Michaela Sciberras paralegal at AB&A Advocates.