Court Holds Travel Insurance Provides No Coverage for Pre-Existing Condition

When making travel arrangements, you often have the option of purchasing travel insurance, which also is known as trip insurance.  Travel insurance can be purchased directly from the travel agent or trip provider, or from an independent company.  Several of the major insurance companies allow you to purchase trip insurance online after your travel has been booked.

Trip insurance provides coverage in the event you have to cancel your trip last minute due to some unforeseen circumstances.  The insurance typically provides coverage for any cancellation penalties you may incur.  Some insurance also provides coverage for medical expenses incurred while on the trip and will reimburse you for costs incurred in connection with baggage loss or delay.

Travel insurance can be purchased at the time or book you trip or anytime thereafter up until the time you leave for your trip.  One thing you cannot do, however, is purchase such insurance after you learn that you need to cancel your trip as a result of a medical condition.  Travel insurance policies typically contain an exclusion barring coverage for cancellations due to pre-existing medical conditions.  The New Jersey Appellate Division recently upheld such an exclusion in Dombrovskiy v. Travel Guard, 2016 WL 5335258 (N.J. App. Div. Sept. 23, 2016).

In that case, Victor Dombrovskiy booked a family trip to St. Lucia on March 19, 2014.  He did not purchase travel insurance at the time he booked his trip.  However, on May 19, 2014, two days before his departure, he decided to purchase travel insurance from the defendant Travel Guard.  The following day – May 20th – he went to see a dentist, complaining of “very strong continuous pain on the left side of [his] mouth.”  His dentist diagnosed him with acute pericoronitis and advised him not to travel.  Thus, Mr. Dombrovskiy canceled his trip.  He subsequently filed a claim under his travel insurance policy because he was unable to obtain a full refund for his trip.

The policy went into effect on May 20, 2014, just one day prior to Mr. Dombrovsky’s scheduled departure and the same day he went to visit his dentist.  As is typical with travel insurance policies, the Travel Guard policy contained an exclusion for a “pre-existing medical condition,” which “was defined as a medical condition that manifested itself 180 days immediately preceding the policy’s effective date, and included the effective date of the policy.”  Id. at *1.  Because Mr. Dombrovskiy was diagnosed with acute pericoronitis on the policy’s effective date his medical condition constituted a pre-existing condition.  Thus, Travel Guard denied coverage.

Mr. Dombrovsky subsequently sued Travel Guard.  Following a bench trial, the trial judge dismissed the complaint, concluding that the pre-existing medical condition exclusion unambiguously precluded coverage.  On appeal, the Appellate Division “agree[ed] with the trial court that Dombrovskiy’s claim came within an exclusion from coverage that was clear and not ambiguous, requiring the dismissal of his claim.”  Id. at *2.

The court noted that although the exclusion barred coverage for a pre-existing medical condition that manifested itself 180 days prior to the policy’s effective date, there was a provision “by which the pre-existing medical condition exclusion could be waived if an insured purchased the travel insurance policy within fifteen days of making the initial trip payment.”  Id. at *3.  Mr. Dombrovskiy was unable to take advantage of that provision because he paid for his trip two months prior to purchasing the policy.

The purpose of the pre-existing condition exclusion is to prevent fraud.  Specifically, it precludes someone who is already feeling ill from going out and purchasing insurance.  Insurance policies are meant to cover only fortuitous losses, i.e., those happening by chance or which are unexpected.  You cannot purchase fire insurance for your home once it is already on fire, nor can you purchase flood insurance as the flood waters are approaching your home.  Similarly, you cannot purchase travel insurance once you are already sick and realize you may have to cancel your trip.

As the concurring judge observed, “the sequence of events here might have supported a reasonable circumstantial inference that appellant was indeed already developing symptoms when he purchased the coverage months after he made his flight reservations and only two days before his scheduled departure.”  Id. at *5 (Sabatino, P.J.A.D., concurring).  The court did not need to address that issue, however, because the policy clearly excluded coverage.

Another issue not addressed by the court, but mentioned by the concurring judge, is what happens if you become ill after you purchase the insurance but within the pre-existing condition window.  Specifically, Judge Sabatino observed:

By declaring the policy’s effective date to be 12:01 a.m. on the date after the insured traveler pays the premium, and excluding coverage for the full day of that effective date, the policy treats as a disqualifying “pre-existing” medical condition one that first manifests itself at a time that can be as late as forty-seven hours after the coverage was purchased. Literally construed, the policy would, for instance, exclude coverage if the insured paid for the coverage at 12:02 a.m. on a Monday and suffered a sudden heart attack at 11:59 p.m. on Tuesday.

Id. at *4 (Sabatino, P.J.A.D., concurring).  Judge Sabatino noted that at least two other states preclude insurers from defining pre-existing medical conditions “to exclude coverage for a condition that manifests after the insurance has been purchased.”  Id at *5.  However, he went on to note that certain other states had adopted contrary legislation.  Id.

It would appear based on the majority’s decision that a condition that manifests itself after insurance has been purchased, but within the pre-existing condition window, would be excluded based on the clear and unambiguous policy language.  Expressing “serious reservations,” Judge Sabatino did not join in that portion of the majority’s opinion that would support such a conclusion.

The takeaway from this case is that if you want to purchase travel insurance you should do so at the time the trip is booked or shortly thereafter.  As noted by the court, the Travel Guard policy waives the pre-existing condition exclusion if coverage is purchased within 15 days of booking the trip.  Unfortunately, that is something Mr. Dombrovskiy failed to do.  Instead, it appears he waited until his tooth already started hurting and he knew it was unlikely he could travel.


© William D. Wilson and, 2016.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.  Excerpts and links may be used, provided that full and clear credit is given to William D. Wilson or with appropriate and specific direction to the original content.

By William D Wilson

I am a partner in Mound, Cotton, Wollan & Greengrass, which is headquartered in New York City. I am in charge of running the firm's New Jersey office, which is in Florham Park. I have been practicing law for approximately 23 years and focus primarily on insurance related matters