Insurer Using a “Pre-existing Condition” Defence? Letter of Demand (AU)

You lodged a claim — for medical evacuation overseas, for income protection, for travel medical cover — and the denial letter cites the magic words: “This claim is excluded under the policy because the condition was pre-existing.” Maybe you had a single GP visit two years ago. Maybe you took a tablet once. Maybe the condition is genuinely unrelated to what you’re claiming for. Either way, the insurer has reached for the most overused defence in the industry and walked away.

Here’s how to test the insurer’s reasoning.

The legal framework

The Insurance Contracts Act 1984 (Cth) sets the rules around pre-existing condition exclusions, especially sections 21 (duty of disclosure), 21A (specific questions for consumer policies), 22 (duty to inform of disclosure obligations), and 47 (medical exclusions). The General Insurance Code of Practice and the Life Insurance Code of Practice require clear written reasoning. ASIC RG 271 mandates the IDR timeframe. Private hospital and extras cover is different: the Insurance Contracts Act does not apply, so complain to the fund, then the Commonwealth Ombudsman.

Common ways insurers misuse this defence

• The condition wasn’t actually disclosed because they didn’t ask. Section 21A flips the burden onto the insurer for consumer policies — if it wasn’t a specific question on the application, you can’t be punished for not volunteering it.
• The current claim is unrelated to the prior condition. Insurers stretch the link. A 2019 sprained ankle does not automatically exclude a 2026 ACL injury.
• “Symptoms in the look-back period.” Many policies define this as actively diagnosed or treated. A single GP visit without diagnosis often doesn’t meet the test.
• Condition was disclosed but insurer didn’t act. If they accepted you with knowledge, they can’t later deny on that ground.
• Materiality. Section 21 requires the non-disclosure to be material — they would not have offered cover or would have charged more. Mere annoyance isn’t enough.

What the document does

The Insurance Complaint quotes the precise exclusion the insurer is relying on, the medical evidence in your favour, the relevant ICA section, and a deadline. Critically, it formally requests every medical report, file note, and underwriting record under the Code — disclosure that frequently shows the insurer’s own evidence is thin.

What Claim Done delivers

Ten-minute wizard. Flat fee. Our Programmatic Algorithms draft a formal complaint to your insurer citing the right sections of the Insurance Contracts Act and the relevant Code, plus the AFCA complaint if the insurer holds the line.

What to expect after sending

If they hold the line, lodge an AFCA complaint — free and binding. AFCA decides on fairness, not just the literal exclusion wording.