Travel insurance giant Allianz is set to refund $1.5 million to Washington travelers after the state's Attorney General's office called foul on its exclusion of mental health conditions from coverage. Bob Ferguson, the Washington AG, led a charge that concluded on a hefty note for the company, which will now reimburse hundreds of customers whose claims around mental health disruptions were previously denied. The settlement arrives in the nick of time, just before a lawsuit was poised to go to trial.
According to the Seattle Times, Allianz, was caught with a policy that discriminated against travelers with mental health issues, from dementia to PTSD — overlooking such psychiatric disturbances as grounds for travel interruption claims. "Allianz would accept a claim over a broken foot, but not a life-altering mental health diagnosis — that's not fair, and it's not lawful," Ferguson was quoted, sharpening the legal edge against unjust exclusionary practices in the insurance realm.
Snagged by an investigation initiated in 2021 after a Washington resident lodged a complaint, Allianz was found to have neglected a grand total of 560 claims due to its mental health clause, as stated by the AOL report. Clients who were slapped with these denials will now see a full refund for both their travel disruptions and premiums paid, a sum amounting to roughly $800,000. Another $700,000 will trickle down to cover the costs of distributing the refunds and the stain of the state’s investigative and legal expenses.
Digging deeper into the heart of the matter, one notable case highlighted by the Washington AG's Office involved a Seattle woman's graduate school trip that went south due to unforeseen panic attacks. Her ordeal put a spotlight on the murky policy definitions, "I was shocked to find out Allianz did not provide coverage as I thought the policy covered travel costs associated with medical emergencies and it never occurred to me that a panic attack would not be considered a medical emergency," she told the AG’s office. In response to the pressing allegations and ahead of the trial, Allianz went on record to deny any violation of state law, insisting its offerings were aligned with industry best practices and consumer protection.
Meanwhile, Allianz has made amends to its policy, scratching out the mental health exclusions. This conforms to a directive from the Washington State Office of the Insurance Commissioner in 2023, implying a growing recognition of mental health issues on par with physical ailments in the orbit of insurance coverages. As of now, travelers in Washington with mental health concerns can pack their bags with an extra layer of assurance that their voyages, at least legally speaking, have a broader safety net.
