Insurance companies love to collect those premiums. Sometimes, however, they’re less keen to pay out when you have a claim.

Canada’s insurers do usually settle up, of course. With so many companies competing for business, no insurer can afford to have a reputation for poor customer service.

But, particularly when it comes to travel insurance, disputes and misunderstandings occur all the time. And that’s why you need to protect yourself from the outset.

For instance, when you sign up for travel insurance, you’ll be given a ‘travel assistance’ phone number to call in case you need to use a medical service. This is so the insurer can direct you to a pre-approved clinic or doctor where it may be able to control costs.

Pre-Approval is Important

Not calling that hotline can be a costly mistake; failure to receive approval could lead to you’re not getting reimbursed for certain medical costs. So make sure you, or a travelling companion, make that call, if at all possible.

Also, be sure to ask the hospital for a detailed breakdown of every service that you received and the costs. When in doubt, get a receipt for everything.

When you do make a claim, do so quickly – even a modest delay can give the insurer a possible reason not to pay. Fill in the claim form diligently, attaching originals of all relevant documents and invoices.

How To Fight A Denial

You've received medical care and submitted your claim - but what if your insurer says no? First, demand a letter from your insurer clearly describing the reasons for the denial, referencing the clauses in the policy that you allegedly contravened, says Milan Korcok, editor of Travel Insurance File.

For example, if your insurer is denying you because of a ‘pre-existing’ condition, find out what part of your medical records it’s using to substantiate the denial.

If necessary, get your own copy of those records and ask your doctor’s opinion about the denial. If warranted, ask your doctor for a note clarifying the condition and see if he or she is willing to intercede on your behalf.

Following this, carefully compose a response appealing the denial by refuting the evidence provided. Base your argument on facts, not emotions, setting a deadline for resolution. Do all this in writing, not by phone – using simple, straightforward language, Korcok suggests.

Who knows, a second look may yield a different result. But, if that doesn’t work, there are other options.

Your Next Step: Call The Ombudsperson

If you feel you’re being ignored and are still dissatisfied, consult your insurance company's ombudsperson. All federally/provincially licensed companies have a dispute-resolution mechanism in place, including some sort of complaints liaison officer on staff.

If the ombudsperson upholds the denial and you’re still convinced you’ve been treated unfairly, take your case to the OmbudService for Life and Health Insurance (www.OLHI.CA, 1-888-295-8112), an independent dispute-mediation system for the insurance industry.

OLHI will conduct an independent review of your complaint after you’ve gone through the preliminary process or if your insurer hasn’t provided you with a final ruling within 90 days of its letter acknowledging receipt of your complaint.

While the results of any mediation aren’t binding, using the services provided by OLHI won’t affect your legal rights – or the rights of your insurance company for that matter - But they may help you reach a reasonable compromise.  

Gordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a consulting firm focusing on retirement readiness. Gordon was a columnist for the Globe & Mail and Morningstar for many years and is also currently a columnist for Investment Executive, Canada’s national newspaper for financial advisors.

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