Liberty Life forced to pay depression claim it had declined

09 April 2015 - 14:17 By Wendy Knowler
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Image: Gallo Images/Thinkstock

Does having a trauma counselling session after a hijacking mean you suffer from depression?

Can you be accused of having suffered from depression if you visited a psychologist for a single session of trauma counselling after a car hijacking?

That’s just what Liberty Life did, in declining a woman’s claim for temporary disability benefits for depression, on the basis that she suffered from depression two months before taking out the policy - that’s what the insurance industry terms a “pre-existing condition”.

The woman, identified only as “Ms B”, lodged a complaint about the decision with the Long Term Insurance Ombudsman’s office in 2013, which made a final determination in her favour, concluding that Liberty Life failed to prove that the pre-existing conditions clause applied to Ms B's claim.

As as result, Liberty Life was forced to settle the claim.

Liberty Life’s policy states that the insurer will not pay any claim in the first two years if the insured had a pre-existing condition such as heart disease, cancer, diabetes or depression when the policy was taken out.

“Even though the complainant’s depression may be linked to an incident that occurred prior to inception,” the Ombud’s office told Liberty Life, “in the absence of any evidence to show a link between the complainant’s depression and any ‘pre-existing condition’, the exclusion clause does not apply in this instance.”

But it was a hard-won victory for Ms B. In July last year, in response to the Ombudsman’s office’s provisional determination, Liberty Life claimed that she was treated by the psychologist in five sessions after the hijacking, and that she suffered from fear and anxiety after the hijacking, which led to depression.

But Ms B’s attorneys explained that while she received a quotation for five sessions with that psychologist, after the first session she said she didn’t see the need for any more.

When the Ombudsman’s office conveyed that information to the insurer, the response was simply: “The claim was repudiated as the policy was only taken after the incident date. Hence no cover existed at date of event.”

That led to the final determination being made against Liberty Life, compelling the insurer to settle Ms B’s claim.

The final determination was made in mid-January but only made public by the Ombudsman’s office today.

Interestingly, had Liberty Life chosen to settle the claim last July, after provisional ruling, the case would not have been made public.

In terms of its rules, the Ombudsman for Long-Term Insurance is required to publicise final rulings, including a summary of the facts concerned, the reasons for the determination and the identity of the subscribing insurer.

You can contact Wendy at consumer@knowler.co.za

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