Does your travel insurance cover mental health claims?

New research from comparison site Mozo.com.au has found more than half of Australian travel insurers do not cover people with mental health conditions.

This means many travellers could be left high and dry while on holiday.

Mozo analysed the product disclosure statements (PDS) of 47 insurers and also conducted a ‘mystery shop’ to find out how insurers treated mental illness. 

All insurers assessed considered stress, depression and anxiety to be a mental illness. Researchers found 24 would not cover mental health conditions.

They found the remaining insurers would consider covering existing conditions for a premium following a medical assessment, with definitions ranging from stress and anxiety to chronic depression and schizophrenia.

Mozo director Kirsty Lamont said many insurers place mental illness in the “too hard” basket.

“While it’s feasible to cover for a range of conditions, from cancer to heart disease, mental illness falls into a murky area that many travel insurers don’t want to touch,” she said.

She said the research found many insurers have a black and white view of mental health. A period of stress 15 years ago could fall into the same category as a current diagnosis of schizophrenia when considering eligibility for cover.

Mental health has varying definitions from insurers – ranging from stress and anxiety all the way through to schizophrenia and suicidal thoughts. Nearly half of all insurers consider exhibiting a sign or symptom of mental health (meaning at least one trip to a therapist, psychologist or psychiatrist) as an example of a pre-existing condition, while 52 per cent counted a medical diagnosis as grounds for considering a condition pre-existing. 

“Many customers booking travel insurance for their dream holiday may be completely unaware that a past therapy session or a bout of post-natal depression could affect their ability to make claims against their cover,” Ms Lamont said.

“It pays to be mindful that some insurers are more progressive than others when it comes to covering customers with a history of mental health.”

The research also found that the relevance of a customer’s mental health history varied greatly between insurers, with half considering a mental health incident at any point in a customer’s history as grounds for mental illness to be listed as a pre-existing condition.

Time frames with other insurers ranged anywhere from five years prior, to the last two months, to a present-day condition.

The mystery shop also found a lack of understanding from some travel insurers regarding the level of mental health cover their policies provided. While some representatives were highly informed, others were uncertain or evasive at best, reading directly from the PDS or answering policy questions with responses such as “maybe” or “it seems to be”.

“While the travel insurance industry is making steps in the right direction when it comes to mental health cover, we’d like to see greater industry-wide coverage,” Ms Lamont said.

“Right now, the onus is very much on the customer to see whether they are covered for any mental illness related incidents.”

The Insurance Council of Australia rejects the assertion that most travel insurers do not offer travel insurance to cover mental health conditions.

The council’s general manager of Communications and Media Relations Campbell Fuller said the industry had moved forward dramatically over the past three years.

“Most travel insurers have removed blanket exclusions for mental health conditions. Most now cover for first instance episodes of mental health conditions,” Mr Fuller said.

“Many insurers will also cover pre-existing mental health conditions, on an individually underwritten basis similar to the coverage available for pre-existing medical conditions.

“The changes to the travel insurance market reflect the importance of providing mental health cover to Australian travellers, with 45 per cent of Australians likely to suffer a mental health condition at some stage in their life.

“The travel insurance industry is working with governments and other organisations to improve mental health coverage. The industry is also seeking data to better understand the risks of Australians travelling with a mental health condition.”

By using Mozo's travel insurance comparison website, you can see whether a provider offers mental health illness cover for pre-existing conditions by clicking 'More info' after you’ve filled in the details of where you plan to travel.