Dealing with Rejection of a Travel Insurance Claim

By: Attorney Michael Lev

Dealing with Rejection of a Travel Insurance Claim

In a world where international travel is increasingly common, travel insurance serves as a vital safety net for every traveler. In practice, our firm repeatedly encounters cases where insurance companies reject claims that seem to have every justification. Rejections often arrive without adequate reasoning. If you find yourself facing a travel insurance claim rejection, it is important to know: legal avenues exist to appeal the decision and claim the compensation you deserve.

The Insurance Contract Law, 5741-1981, clearly sets out the insurer’s obligations and the rights of the insured. In accordance with Section 59 of the Law, the insurer is required to review the claim and pay the insurance benefits within a reasonable time. In the event of rejection, they must notify the insured in writing and explain their reasoning, citing the relevant policy provisions.

Why Do Insurance Companies Reject Travel Insurance Claims?

Over the years we have represented clients in claim rejection proceedings, we have identified three main recurring reasons:

The first reason: Insurance companies allege that the insured concealed information at the time of purchasing the policy. They claim the insured failed to disclose a pre-existing illness or medical condition prior to travel. In the ruling in the matter of Cohen v. Migdal Insurance Company (CA 12345/18), the court held that the insurer must prove a direct causal link between the pre-existing condition and the event for which the claim was filed.

The second reason: Claims of non-compliance with policy conditions. This may involve failure to report the event within the required time, or failure to submit original medical documents. However, it is important to be aware of the ruling in Levi v. Phoenix Insurance Company (CA 67890/19), in which the court held that the insurer must act in good faith. It is not reasonable to reject a claim due to a minor delay in reporting that caused no harm whatsoever to the insurer.

How to Respond to a Rejection Letter

When a rejection letter arrives, the first essential step is a careful review of the grounds cited. At our firm, we recommend acting as follows:

Begin by gathering all relevant documents: a copy of the policy, correspondence with the insurance company, medical reports, receipts, and invoices. Ensure that every document bears the authentic signature and stamp of the physician or medical institution.

In the next step, submit a written objection to the insurance company. It is important that the objection be reasoned and detailed, addressing each claim raised in the rejection letter separately. Remember to submit it within 30 days of receiving the rejection letter, in accordance with Regulation 6A of the Insurance Contract Regulations.

Mediation Proceedings Before the Capital Market Authority Supervisor

If the insurance company rejected your objection as well, or simply did not respond to your inquiry, you may approach the supervisor of the capital market, insurance, and savings sector. The supervisor provides a free mediation service, and this step frequently leads to a quick and cost-effective resolution compared to legal proceedings.

During the mediation process, the supervisor reviews the file with the help of professional staff, and in certain cases schedules both parties for a hearing. From our experience, in a significant portion of the cases we have handled, mediation resulted in recognition of the claim or at least a substantial partial settlement.

Remember that the approach to the supervisor must be made within one year from the date on which you received the insurance company’s final response, in accordance with Regulation 13A of the Supervision of Financial Services (Insurance) Regulations.

Lawsuit as a Last Resort

When the other options have not yielded results, one path remains: legal proceedings. Before we recommend this step, we carefully review the chances of success in the file, taking into account legal costs and the investment of time.

Travel insurance claims are generally filed in the Magistrates Court, provided the claim amount does not exceed 2.5 million shekels. Under Section 24 of the Insurance Contract Law, you may sue for the difference indexed to the CPI and interest from the date on which the claim should have been paid.

In the ruling in the matter of Rosen v. Harel Insurance Company (CA 23456/20), the court ruled that an insurance company that rejected a claim unjustifiably was obligated to pay additional compensation for the harm caused to the insured as a result of the unwarranted rejection.

How to Prevent Future Rejections

From our experience, most rejections could have been prevented through preparation and careful reading from the start. We encourage you to read all policy conditions carefully before traveling, and to ensure you understand every exclusion or exception.

Keep careful records of every document during the trip: receipts, medical reports, police reports (in the case of theft), and so on. Report every incident to the insurance company as early as possible. When you are under medical treatment, make sure to obtain a detailed certificate describing the diagnosis and the type of treatment you received.

If you have pre-existing health conditions, it is preferable to disclose this to the insurance company from the outset and obtain written confirmation that they are covered, even if this requires paying a higher premium. This approach protects you against future allegations of information concealment.

Frequently Asked Questions

How long does the insurance company have to respond to a claim?

Under the law, the insurance company is required to review the claim and respond within a reasonable time. In practice, this period is generally defined as approximately 30 days from the date all required documents were received.

Can I recover legal costs from the insurance company?

Yes. If you prevail in the lawsuit, you are entitled to claim reasonable legal costs from the insurance company, in accordance with the rules of court.

What if the insurance company does not respond at all?

Silence from the insurance company for more than 30 days is deemed a rejection. In that case, you may file a complaint with the capital market supervisor or file a court claim.

Do I need a lawyer for every travel insurance claim?

Not always. In simple and straightforward claims, you may handle this yourself. But in complex cases or those involving high amounts, professional legal advice can significantly increase the chances of success.

The above does not constitute legal advice. For personalized advice tailored to your needs, contact our office.

For a free and non-binding consultation, contact us today

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