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Issue 25 - May 2016

Key determination


This determination illustrates the importance of interpreting clauses in the context of the whole policy.

The applicant had taken out travel insurance with the financial services provider. She was the only person insured on the Certificate of Insurance. Prior to departure, her mother committed suicide and the applicant cancelled her holiday and claimed on the policy.

There was no dispute that the holiday was cancelled in circumstances that were neither expected nor intended and which were outside the policyholder’s control.

The issue arose because the policy contained an exclusion for claims arising from suicide or attempted suicide. Arises was defined to mean “directly or indirectly arising or in any way connected with.”

This was the 26th exclusion of 33 contained in the policy. The preliminary words to the general exclusions stated “We will not pay under any circumstances if …”

Putting it all together, it read:

“we will not pay under any circumstances if … your claim arises from suicide or attempted suicide.”

The FSP denied the claim.

The exclusion had to be considered in the context of the whole policy
The issue arose whether the suicide had to be that of the insured or could be of any person.  The FSP stated that if the clause was meant to be limited to the suicide of the insured it would have said “if your claim arises from your suicide”.

However, reading the policy as a whole, and particularly the exclusion clauses, showed there was some confusion as to whether each of the exclusions applied only to the insured or to a wider population.

There were specific times when the general exclusions were said to apply to persons other than the insured. They were:

  • The opening clause to the medical exclusions, which related to pre-existing conditions, was said to apply to any person, including the insured, the travelling companion or a relative. This set the scene for the balance of the medical exclusions.
  • Exclusion 30 referred to the insertion of an AICD where the insured, their travelling companion or a relative required the procedure.
  • Exclusion 31 applied to the death or hospitalisation of any person aged 85 or over, who was not listed on the Certificate of Insurance, regardless of the country they may live in.

Reading all the exclusion clauses in context, it was not clear that the exclusion clauses were to apply to a condition or event affecting a broader population, even where this was not specified. The exclusion clause applying to suicide was therefore to be interpreted narrowly and the FSP was required to accept the claim.

For crisis support and suicide prevention, call Lifeline 13 11 14.