Mr. Chan has a medical insurance policy. In view of his age, his doctor advised him to undergo a colonoscopy. The check-up was routine and simple, and as a result, Mr. Chan did not need to stay overnight at the hospital and returned home the same day.

He then filed a claim with his insurance company for the cost of the colonoscopy. When his insurance company rejected his claim, Mr. Chan guessed that the rejecting reason was because his colonoscopy did not involve hospitalisation.

Actually, most medical insurance policies cover day surgery, which means that hospitalisation was not a prerequisite for Mr. Chan’s claim case.

Yet, Mr. Chan was rejected because his colonoscopy was a preventive measure in this case. Despite the fact that it was recommended by his doctor, it was not based on Mr. Chan’s current medical need. To clarify, if Mr. Chan has been suffering from abdominal pain, and based on his doctor’s diagnosis, had undergone the colonoscopy to find out the cause of the pain, the cost of the colonoscopy would have been covered by his insurance policy whether he was hospitalised or not.

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Many people think only about the transportation of industrial and manufactured goods when it comes to cargo insurance. But there’s much more to it – the general public, for instance, have a need for protection that’s offered by cargo insurance. A good example is when individuals or whole families emigrate – they certainly want to know that their personal belongings and household property are safely protected during the long journey overseas.

It is particularly important that when calculating the cost of personal cargo insurance, customers understand that there could be variances in the market value of their household possessions and furniture between Hong Kong and their ultimate destination.

If an item has a higher value in the destination market and the customer bases its value for insurance purposes on its Hong Kong value, if the item is damaged in shipment, the insurance company will treat this as under-insurance and use the “average clause” to calculate the compensation based on the proportion of under-insurance, which means that the customer will need to bear the amount of difference in the loss.

To avoid this from happening, customers are advised to provide their insurance company with a complete list of items to be transported and insured (together with the items’ brand names and Hong Kong market value) to help their insurance company ensure that the sum insured is adequate to protect the customer from personal financial loss.

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Ms. Tsang took out medical insurance in July 2017. Nine months later, Ms. Tsang was hospitalised for 10 days during which a left hemithyroidectomy was performed on a thyroid mass. It was later diagnosed as a benign thyroid nodule. 

Ms. Tsang then filed her medical expenses claim with her insurance company. However, her insurance company rejected her claim as they found that Ms. Tsang was hospitalised because of a transient ischemic attack in February 2017. Because Ms. Tsang failed to disclose this as part of her medical history when taking out the insurance, her insurance company declined her hospitalisation claim on the grounds of material non-disclosure. 

Ms. Tsang then explained that she had been admitted to a public hospital with dizziness in February 2017. Her condition was diagnosed as a transient ischemic attack. Later, Ms. Tsang received a further check up at a private hospital, the results of which proved normal. As a result, Ms. Tsang believed that it was not necessary for her to declare the initial diagnosis at the public hospital. 

In this situation, Ms. Tsang should have disclosed all medical history and information fully and accurately when applying for medical insurance. The necessity to disclose certain medical information does not depend on the result of a medical check-up. If customers are uncertain about what information or medical history is important in applying for medical insurance, it is better for them to declare all information.

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It is common for companies to transport goods from one place to another. The process usually involves different parties, such as forwarders, airline companies or shipping agents, etc. and every party expects the transportation to be as smooth as possible. However, incidents sometimes occur which are not anticipated. If a stevedore strike happens, carriers will assess the risk and may decide to change the discharging port, say from Hong Kong to Yantian port. Is the cargo policy still in force?

According to sub-clause no. 10 of the Institute Cargo Clauses 1982, if the insured changes the destination/discharging port which is different from the destination port specified in the policy, with immediate notice given to the insurance company, coverage can be extended with conditions and the payment of an additional premium. If immediate notice is not given, the existing cargo insurance may not provide coverage.

However, the Institute Cargo Clauses was revised in 2009. According to sub-clause no. 10.1 of the Institute Cargo Clauses 2009, if the destination is changed by the assured from the original port, the insured still needs to notify his insurance company promptly to agree the terms and rates to continue the coverage. But under sub-clause no. 10.2, it extends protection for the assured. The assured can still enjoy the coverage of the original cargo policy even if he does not inform his insurance company about the change of discharging port, but only in the case that he is not notified about the change. This extended protection is also the same concept set under Marine Insurance Ordinance, Section 49, “Excuses for deviation or delay” (1) (d) “where reasonably necessary for the safety of the ship or subject-matter insured;”.

In conclusion, in expressing the duty of the assured on change of port of discharge, sub-clause no. 10.2 of Institute Cargo Clauses 2009 is clearer and offers more protection than the 1982 version.

If a strike does occur, it is advised that the insured keep in close contact with the forwarder or carrier. If there is any change in the voyage or the port of discharge, it is crucial to inform the insurance company immediately to ensure that comprehensive cargo insurance cover can be obtained.

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Mr. Lee sprained his left knee while playing volleyball last month. The resulting pain left him unable to stand and, as a result, he was admitted to Queen Elizabeth Hospital (QEH) where he was diagnosed with an Anterior Cruciate Ligament tear and underwent an operation. After 5 days at QEH, he was transferred to Kowloon Hospital (KH) for 10 days of recuperation.

Mr. Lee then submitted a claim form for hospital cash benefit to his insurer after being discharged from KH. However, his insurance company only paid hospital cash benefit for his 5 day hospitalisation in QEH and rejected his application for the 10 day hospitalisation in KH on the grounds that KH does not fall under the definition of “Hospital” in Mr. Lee’s hospital cash insurance policy.

Medical insurance plans either reimburse hospitalisation and surgical expenses or pay a daily cash benefit which helps to reduce the financial burden of the insured person during his hospital confinement period. In these insurance contracts, “Hospital” is usually defined as an establishment recognised, constituted and legally licensed as such under the laws of the country in which it is situated to provide care and treatment to sick and injured persons as paying bed patients, and which:

1. has facilities for diagnosis and major operations; and
2. provides 24 hours nursing services by licensed registered nurses; and
3. is under the supervision of one or more Physicians; and
4. is not primarily a clinic, or an institution for extended care, or a place for recovering alcoholics or drug addicts, or a nursing/rest/convalescent home, or rehabilitation centre, or home for the aged, or hydro-clinic or similar establishment

In Mr. Lee’s case, despite the fact that KH is called a “Hospital”, its true purpose is to primarily provide extended-care services to convalescent patients. And, particularly in Mr. Lee’s case, his stay at KH was essentially for recuperation, not even therapy. Therefore, it did not fall under the definition of “Hospital” in the insurance contract, resulting in the insurance company declining Mr. Lee’s claim for hospital cash benefit.

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A clear understanding of insurance coverage details is essential and critical for customers to enjoy the full extent of their protection. What follows is an example that illustrates why customers should take note of the details of benefit cover before upgrading their medical insurance plan.

4 years ago, Mr. Chen took out a medical and hospitalisation insurance plan with a maximum benefits limit of HK$100,000 per year. Unfortunately, Mr. Chen felt chest pains one day and was admitted to hospital where he was diagnosed with coronary heart disease. Some time later, upon renewal of his policy, Mr. Chen upgraded his existing plan to an upper benefit limit of HK$500,000 in order to enjoy better protection.

Two months following policy renewal, Mr. Chen was again admitted to hospital with chest pains. Percutaneous Transluminal Coronary Angioplasty was done and a hospital bill of around HK$350,000 was incurred. After discharge, when Mr. Chen submitted his claim for hospital expenses, he was told by his insurer that his maximum benefit limit was HK$100,000 instead of his upgraded plan limit of HK$500,000.

Because Mr. Chen had been diagnosed with coronary heart disease prior to his policy renewal and upgrade, his coronary heart disease was classified as a pre-existing condition in the upgraded plan. Since the pre-existing illness was excluded from the upgraded cover, the increased benefit limit of HK$500,000 was not applicable to Mr. Chen’s pre-existing condition of coronary heart disease. Accordingly, the insurance company calculated his claim for coronary heart disease based on his maximum benefit limit that was in effect before he upgraded his plan. However, Mr. Chen’s upgraded benefits will be applied to any insured illness that first occurs after his policy upgrade.

In view of the above case, it is recommended that customers should take out a medical insurance policy with a higher benefit level earlier in life in order to ensure that they have enough coverage in their retirement stage.

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When incidents occur during a sea voyage, crew members often have no alternative but to throw some of the cargo overboard to lighten a vessel in order to reduce the potential risk that threatens the safety of the vessel and its crew members. Incidences of shipwreck may also cause cargo to be lost or destroyed. Under cargo insurance policy, this damaged or lost cargo is treated as “Sacrifice”. Is “Sacrifice” cargo covered under cargo insurance?

Take the mega container vessel “MOL Comfort” accident in June 2013 as an example. The hull was broken into 2 parts due to bad weather during her voyage from Singapore to Jeddah. The vessel suffered widespread damage. Although all 26 crew members had been rescued, all cargo was destroyed or lost.

As the hull was broken into 2 parts in this accident and the vessel sank, all property was lost at sea and it was difficult to judge the portion of the lost property each owner was responsible for. According to the Institute Cargo Clauses, under the rules of General Average, insurers had the right to share the loss among including but not limited to the ship owner, other cargo owners and/or their respective insurers involved in the same voyage.

These rules of General Average could also be applied in the situation when crew members need to jettison cargo overboard in order to lighten a vessel during times of potential danger that threaten the safety of the vessel or crew members. Under the rules of General Average, the ship owner, other cargo owners and/or their respective insurers are also required to bear the loss together with the affected property owners.

To conclude, the above incident illustrates the importance of taking out marine cargo insurance. This is because even if your cargo was not damaged or lost in an accident, you still have an obligation to share the loss of other cargo(es) which was/were “sacrificed or lost” in the same voyage under the rules of General Average. Cargo insurance, at least, provides security for you in such circumstances and prevents further financial loss caused to you.

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If your client is shipping goods outside of Hong Kong to a distant destination, it is important that he checks carefully whether he is permitted to buy a normal cargo insurance policy from a single Hong Kong-based insurer to cover his entire journey from end to end. 

In many cases these days, the customer may need to take out insurance in both Hong Kong and the destination country to make absolutely certain that all parts of the entire journey are covered. This is because of the “Admitted Policy” regulation. 

An increasing number of countries around the world have rules and regulations governing the practice of companies importing into their country taking out insurance in the country of origin or other countries. On the other hand, in Malaysia for example, the insured may be entitled to enjoy a tax incentive if they buy insurance from a Malaysian insurance company. 

In some cases, if the customer buys their insurance in other countries, not only will they not be eligible for the tax incentive, but it could also affect their claim. An insurance policy of this type is called the “Admitted Policy”. In addition, as well as benefitting from a related incentive offer, buying insurance from an Admitted insurance company can often result in the insured enjoying the protection of the destination country’s insurance ministry. 

Insurance authorities in some destination countries may also help the insured in cases where, for example, a natural disaster has depleted the funds of the insurer. Government help may also be on hand if the insured feels his insurer has mishandled its claims. 

It is vital for the benefit of your clients that you are always up to date as the incentive offers and other regulations are constantly changing in some destination countries. By contrast, some distant countries (Libya for instance) may apply penalties rather than incentive offers. In Libya, all marine cargo imports must be insured through local insurers. Fines up to US$78,000 and/or up to 6 months imprisonment have been applied.

In some cases, clients may be advised to take out insurance both in Hong Kong and the destination country. 

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When shipping a product overseas, the exporter must be aware of packaging, marking, documentation, and insurance requirements. Different products may require different markings for shipments. Exporters shall ensure their goods are clearly marked according to the shipping companies’ guidelines and insurance requirements to prevent any delay in shipping or in the worst case, delay in claim settlement.

Difficulties arise when damaged goods are unidentifiable either because of the lack of clear marking from the beginning or the loss of their identifying marks during the shipment. In such cases, insurers may need to handle the claim in a special way. Just take the below situation as an example to further elaborate how an insurer will handle such claim when the goods are unidentifiable at time of loss.

For cost saving purposes, it is common that a number of consignees may share cargo container space. Some goods, such as sugar or flour, are hard to distinguish if they are shipped in the same cargo shipment without proper marking. When there is any damage during the journey of transportation, the insurance company can hardly define the loss and therefore will need a surveyor to further investigate and assess the degree of damage. This will take a longer period of time for processing the claim. What’s even worse, all the consignees may consequently need to bear a portion of the loss according to the contribution clause.

Proper packaging in addition to clear and secure marking plays a critical role in the export process. They help minimise the chances of product shortage and ambiguity in loss assessment, which will then help speed up the claim process.

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Did you know you can still enjoy medical insurance cover for up to 30 days after your policy termination?

Nowadays, some medical insurance products, such as MediSure Plus provide “Continuity of Benefits after Policy Termination”. This provision provides coverage to the customers after policy termination up to a maximum period of 30 days. But this is only applicable if the claim had been reported to and accepted by the insurance company prior to such termination or non-renewal. We will elaborate further on provisions like this in the story below.

Mr. Li has had a medical insurance policy for three years. As he plans to study in America soon, he has informed the insurance company not to renew his insurance policy. Six days before the termination of his policy, he broke his right elbow in a traffic accident and was admitted to hospital for treatment.

During his hospitalisaiton, Mr. Li made an inquiry to his insurance company about claiming medical expenses for this hospitalisation. As he still needed to stay in the hospital for treatment after termination of his medical insurance policy, he worried that he would be unable to claim his hospitalisation expenses incurred after termination of policy.

Mr. Li is lucky that he was insured with MediSure Plus insurance which provides “Continuity of Benefits after Policy Termination”. As the admission happened before policy expiry and his claim for hospitalisation expenses was approved by the insurance company, he could still enjoy the cover despite the fact that his policy had expired.

However, if this traffic accident had happened after Mr. Li’s emigration to America, or if Mr. Li had received treatment in America, the continuity of benefits under this provision would not have been applicable. According to the terms and conditions of his medical insurance policy, this provision will become ineffective if the insured person emigrates to another country or receives treatment outside his usual country of residence.

Therefore, you are advised to read the terms and conditions of your policy carefully or to contact your insurance company for clarification of your policies if you have any questions.

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