Ingram v QBE Insurance (Australia) Ltd [2015] VCAT 107 (27 October 2015) centred on a claim by Ms Ingram made under a travel insurance policy. The claim sought to recover Ms Ingram’s pre-paid travel expenses by reason of Ms Ingram being prevented from traveling overseas by depression.

When Ms Ingram began planning her visit to New York in 2011, she had never previously shown any signs of depression. In order to secure her travel arrangements, Ms Ingram paid a deposit, a part of which was applied for the purchase of an insurance policy for Ms Ingram. By January 2012, Ms Ingram had begun to experience symptoms of depression. By April 2012, she sought to claim $5,860.00 on the travel insurance policy, being the travel expenses incurred.

Ms Ingram’s claim for payment was refused on the basis that the claim arose from a mental illness that was not covered by the policy.

It was put on behalf of Ms Ingram that her insurer’s failure to pay the claim amounted to unlawful discrimination. In response, the insurer claimed that:

  1. insurance cover for the mental illness was excluded under the policy;
  2. the refusal of the claim was not due to the policy being interpreted in a manner designed to discriminate against Ms Ingram as a result of her disability; and
  3. even if it was found that the policy did amount to discrimination, then such discrimination is not unlawful by reason of an exception to the Equal Opportunity Act 2010 (Vic) and/or the Disability Discrimination Act 2004(Cth).

The Victorian Civil and Administrative Tribunal (VCAT) ruled that the wording of the policy and the application of the wording resulted in unlawful discrimination against Ms Ingram.

VCAT determined that it was not satisfied on the insurer’s evidence, that the required statistical basis was established to warrant the drafting or ruling on the policy to discriminate against a disability. On this basis, the resulting discrimination was found to be unlawful. VCAT further determined that the insurer would not have suffered an unjustifiable hardship by including mental illness under the policy.

VCAT ordered that the insurer pay Ms Ingrid $4,292.48 in economic loss, as well as $15,000.00 in non-economic loss for her hurt and humiliation.

As the first of its kind, this finding is a cautionary tale for insurers proposing to exclude cover under polices by reason of disabilities without adequate:

  1. actuarial evidence to substantiate the commercial necessity for such an exclusion; or
  2. evidence to demonstrate financial hardship to the insurer should claims of this kind be accepted,

Insurers should reconsider the enforcement of policy terms by reference to the applicable discrimination laws.