Introduction
Background
The Disability Discrimination Act 1995
Part I: definition of disabled
Part III: ‘Goods, facilities and services’
Association of British Insurers (ABI) Code of Practice
Different types of insurance
Private health insurance
Travel insurance
Life insurance
Motor insurance
Home contents insurance
Income protection insurance
Payment protection insurance (PPI)
Complaints
When to make a complaint
Legal redress
Insurance initiatives for mental health
MDF The Bipolar Disorder travel insurance scheme
Rethink
Useful organisations
Insurance code of practice and complaints
Information services
Insurance services
Further reading
References
This factsheet is for people who want to know more about insurance and the effect that any previous or existing mental health problems may have on obtaining cover. It gives background information on discriminatory practices that may affect people with mental health problems and explains how to make a complaint or seek redress, particularly under the Disability Discrimination Act 1995 (DDA). It also gives contact details of organisations and insurers who may be able to help.
Mind receives numerous calls and letters from people who have, or have had, mental health problems and cannot get insurance cover. Many people find that when they inform some insurance companies about previous or existing mental health problems, they are either refused cover or asked to pay an increased premium.
Purchasing insurance cover for items such as home contents may be considered an unnecessary expense if your only income is sickness or disability benefit. It is therefore essential that insurance can be bought at a reasonable price. Some companies provide cover specifically for people with pre-existing medical conditions, including mental health problems (see ‘Useful organisations’).
In the past, insurance companies found it difficult to obtain medical records and reliably assess risk from mortality data. As a result, the companies worked together to create their own mortality tables based on the national average. Under this system, most people could access insurance. Discrimination against people with mental health problems (and other groups seen as ‘high risk’) began to occur as some large insurance companies moved away from this system. Advances in information exchange meant that these companies could access individual medical records and exclude anyone seen as presenting an unacceptable risk. This is called ‘cherry picking’, and the main motivation behind it is to maximise profits for insurers. Some insurers ask a single general question about whether a person experiences (or has experienced) mental health problems, and decide that anyone answering ‘yes’ to this question poses too high a risk to insure.
The problem with cherry picking is that it puts pressure on the traditional companies (many of whom really believed in insurance for everyone under the old system), leaving them to pick up all the ‘high-risk’ clients. As a result, many of these smaller companies have been forced to adopt the same practices as the larger companies, which means that many people with any form of medical history are unable to obtain insurance or are forced to pay premiums that are unacceptably high. This creates two categories of people: those who are ‘insurable’ and those seen as ‘uninsurable’.
People with mental health problems have generally fallen into the latter group. Read and Baker (1996) [1] found that 25 per cent of mental health service users had been turned down by a finance or insurance company. However, this situation has improved substantially in recent years because of changes to the legislative framework (especially the Disability Discrimination Act) and the effects of this on industry guidelines.
If you do encounter questions about your mental health when completing an insurance application form and you still want to take out the cover, it is always advisable to give an accurate account of your medical history. If the insurer subsequently finds that you have not disclosed information that they consider relevant, they are entitled to reject any potential claim and may invalidate the policy. This may also affect subsequent applications and future claims.
The DDA makes it illegal to discriminate against disabled people (which includes a person with mental health problems). Many people, including mental health professionals, are often unsure whether people with mental health problems are considered disabled under the terms of the DDA.
The DDA defines a disabled person as someone who has a ‘physical or mental impairment which has a substantial and long-term adverse effect on his ability to carry out normal day-to-day activities’. (It is also worth noting that the definition extends to a person who has previously had a disability.)
Part III of the DDA deals with ‘Discrimination in relation to goods, facilities and services’, which is relevant to obtaining insurance cover. The DDA makes it “unlawful for a provider of services to discriminate against a disabled person ... in refusing to provide, or deliberately not providing, to the disabled person any service which he provides, or is prepared to provide, to members of the public”. In simple terms, this means that insurers must be prepared to offer their service to a disabled person on the same terms as to any non-disabled person.
This part of the Act has been enforceable since 1996 and although it has made it illegal to refuse insurance or to charge higher premiums to a disabled person, certain conditions are attached to the interpretation of the law which, in the end, may still lead either to refusal of insurance or to an increase in the insurance premium if the insurer can show good grounds for this. However, there is an onus on insurers to be ‘fair and reasonable’ throughout.
Even if insurers have adopted a policy specifically on, for example, people with mental health problems, they still have to satisfy the conditions detailed above.
A risk assessment should always be carried out by the insurer when they are deciding whether to insure someone. It should include a statistical analysis that shows that a person presents a ‘higher than average’ risk, since an individual can sue an insurance company under the DDA if they are declined insurance unfairly. However, people are reluctant to take out cases against big institutions, and only a small handful of cases taken out under the DDA have been successful. [2]
Insurers may still ask the question about whether the person applying for insurance has ever experienced a mental health problem, and either refuse insurance or increase the premium on the basis that the person says they have. If you are applying for insurance and this happens to you (or you believe that your insurer has treated you unjustly), you could have a case under the DDA 1995 and you may wish to seek legal advice (see ‘Complaints’ and ‘Legal redress’ sections).
There are, however, many instances where insurers can justify treating a person with a disability or a mental health problem less favourably, despite the existence of disability legislation. More information is given under the separate sections on private health insurance, travel insurance and life insurance.
One of the main criticisms of the DDA over the years has focused on the duty of employers, insurers and service providers to be ‘fair and reasonable’ in making goods, facilities and services available to disabled people. Clearly there is scope to interpret the meaning of ‘fair and reasonable’ to suit the various parties, and this has not always supported the needs of people with disabilities.
The ABI sets out the general principles and exceptions from the DDA relating to insurance (see ‘Useful organisations’ for contact details). As already stated, an insurance company must be fair and reasonable in its dealings with disabled people (including people with mental health problems) and must account for any difference in treatment between disabled and non-disabled people. Insurers' decisions must be based on information relevant to the assessment of the risk to be insured and from a reliable source. These may include:
The ABI specifies that insurers must make sure that the information is accurate and that their use of it is reasonable. It must be shown that the disabled person represents an increased risk; if not, there should be no differentiation in their treatment. Remember that the onus is on the insurer to show that their actions are ‘reasonable’, so if you believe that your insurer has acted unfairly, you may wish to seek legal advice (see ‘Complaints’ and ‘Legal redress’ sections).
This section covers different types of insurance. It sets out instances where insurers still justify treating disabled people less favourably despite the existence of the DDA, but it is not a statement of the law. If you are unsure about whether you have been treated unjustly by your insurer, you should consider seeking legal advice or taking up a complaint with the Financial Services Ombudsman (see ‘Complaints’ and ‘Useful organisations’).
Despite the existence of the DDA, special exemptions can still apply to private health insurance. Insurers tend to refuse cover for conditions and illnesses that exist at the time an insurance contract is taken out (called pre-existing conditions). They may also include an ‘exclusion clause’, which means that they will not provide cover for the first years of a policy if the person has experienced a serious condition before the start of the policy. Refusal to provide cover must be based on objective evidence (see above) that the person’s recent medical history increases the risk of them making a claim.
Proof of additional risk may be based on claims information, government statistics, medical research or industry sources. Health insurers may also request a medical report on an individual. There must be reasonable grounds for a decision to refuse cover; for instance, evidence that the person’s pre-existing medical condition is likely to increase risk. However, the decision must be based on the person’s health condition and not made just because they are disabled. See ‘Useful organisations’ for a list of companies that specialise in providing insurance cover for people with pre-existing medical conditions.
If an existing policyholder develops a mental health condition such as schizophrenia or bipolar disorder (manic depression), hospital treatment is generally limited to a specific time scale, and outpatient treatment to a maximum ceiling (for example, a period of time spent in an acute hospital ward under the Mental Health Act may last for several weeks or months, and outpatient appointments and treatment may go on indefinitely or until such time as the person no longer needs that service). The specific terms of such insurance cover may be related to severity, stabilisation and likelihood of recurrence, but there is a measure of discretion in individual circumstances.
It is not advisable to travel overseas without travel insurance, since in countries outside the EU non-residents are usually not entitled to emergency healthcare without charge, and charges can be considerable.
If you are travelling within the European Community (EU) you can apply for a free European Health Insurance Card (EHIC card). This card replaced the old E111 card which was phased out in 2006. The card lasts for three to five years, and entitles the holder to receive free or reduced-cost emergency healthcare when visiting EU countries. You can apply for the card online at www.ehic.co.uk or by telephone, by calling 0845 606 2030, or via a local Post Office. It is worth remembering that this EHIC card is not a substitute for comprehensive travel insurance, e.g. it won’t cover the cost of cancelled travel arrangements, lost money or luggage or anything else you would expect to be covered under this type of insurance.
A travel insurer cannot refuse a travel policy to a disabled person, which includes a person with mental health problems. However, the insurer can refuse to cover claims arising out of the disability if they can justify that the condition represents an increased risk. A travel insurer may also exclude cover in relation to a medical condition that exists at the time or before the contract is made. This means that if you have a pre-existing condition of schizophrenia, for example, and you experience symptoms whilst you are on holiday, your insurer may refuse to cover treatment of this particular condition. However, if you break your leg, and this is clearly not related to the schizophrenia, the claim should be paid as normal.
The standard travel insurance policies available from travel agents exclude pre-existing conditions, such as mental health problems. Alternatively, agents may offer specialist policies that give full cover, but these cost much more.
Be aware that ‘standard’ insurance policies sold with holidays often have exclusions in the small print, which means that these policies are unlikely to be of use to you in that you will not be able to claim for anything relating to your existing or previous mental health condition. However, the other elements of the travel insurance should not be affected.
You can choose to take out your own insurance policy, rather than the ‘standard’ policy sold with the holiday.
Life insurance or life assurance policies are designed to cover policy holders in the event of their death, for example from a terminal or critical illness. Such policies may be used to cover outstanding mortgage costs and funeral expenses and/or compensate for the loss of income to the insured person’s family. If life insurance cover is refused or premiums are increased, the insurer would need to show that the disability or medical condition would directly affect life expectancy. In cases of ‘severe mental health problems’ (such as schizophrenia), the insurer could argue that this diagnosis increases the risk of suicide.
There is no national policy with regard to motor insurance for people who experience mental health problems. The ABI says the decision is up to individual insurance companies, who may exercise discretion about whether they provide insurance or offer it only at a higher premium.
It seems that if the Driving and Vehicle Licensing Authority (DVLA) approves a driving licence, then an insurance company will usually agree to insure the individual involved, though they may charge a higher premium depending on circumstances such as previous claims and motoring convictions.
Home contents insurance is something that many non-disabled and disabled people alike may consider an unnecessary expense. For people on low incomes in particular it may appear to be an unnecessary cost. However, it needs to be considered like any other type of insurance, particularly since users of mental health services can often be more vulnerable to incidents of theft and manipulation than other members of a community. As discussed above, insurers cannot refuse cover unless they can support their decision with reliable data and statistics.
Be aware that insurance premiums may increase or decrease in relation to the postcode/address to be covered. Some addresses are considered ‘high-risk’ areas by insurance companies. Checkout www.thisismoney.co.uk/code-breaker to find out how insurance premiums compare in your area.
This type of insurance is designed to cover financial obligations such as mortgage bills if a person is unable to work because of ill-health or accidental injury. It can prove difficult to obtain if you have pre-existing medical or mental health issues, or have had these in the past. Any claims relating to the condition would be excluded, though new health conditions would still be covered.
Whilst it can be argued that some types of insurance cover are a good idea, others are probably best avoided. PPI is supposed to provide cover if someone finds they are unable to repay a loan because of ill-health or loss of income. However, PPI has been heavily criticised by the Financial Services Authority, which describes it as a profitable scheme for lenders but an unnecessary financial burden for consumers. Following an investigation by the Competition Commission into the workings of PPI, it is expected that selling this type of insurance for credit cards and personal loans will be banned by October 2010.
Any complaint should be made to the insurance provider in the first instance. However, if this is not dealt with satisfactorily, you can then make a complaint to the Financial Ombudsman Service (FOS). The FOS covers all financial services provided in or from the UK.
The FOS receives a large number of complaints, so the process may be lengthy, especially if an informal agreement cannot be reached with the insurer. Fifty per cent of complaints are resolved informally at the earliest stage, and between a third and a half of cases that require a formal decision from the FOS are resolved in favour of the consumer.
The FOS provides a telephone interpretation service for those who prefer to conduct the process in a language other than English, as well as materials in a range of languages. Their materials are also published in Braille, large print and audiotape.
Details of how to contact the FOS are given under ‘Useful organisations’.
You may also wish to consider taking out a case against an insurer under the DDA. If you decide upon this route, you will need to seek legal advice. In the first instance you may wish to contact your local Citizens’ Advice Bureau or a local law centre or law society, as this type of service is free of charge. It may also be useful to speak to someone with legal expertise in the DDA, to establish whether you have a case worth pursuing, as this will save you any unnecessary expense. If help is not available via this route, you may need to seek advice from a solicitor who specialises in disability legislation. The first step is to establish with the solicitor whether the law can help you and whether your case is likely to succeed.
If you want advice from a solicitor who has knowledge of mental health law and issues, contact Mind’s Legal Advice Service. The Law Society can also advise on suitably qualified solicitors (see ‘Useful organisations’ for details of both organisations).
MDF The Bipolar Organisation (formerly the Manic Depression Fellowship) set up the first travel insurance scheme for people with mental health problems (specifically bipolar disorder). The organisation liaised with brokers to arrange travel insurance for people who are MDF members. The policy covers bipolar as a pre-existing condition, which most insurers will not (see ‘Useful organisations’ for details).
MDF has outlined the importance of helping insurance firms to understand that that many people diagnosed with a mental health problem are not high-risk clients.
Rethink gives information through a section of its website. This includes lists of insurance companies and brokers who provide cover for customers with mental health problems. You can also contact the Rethink Advice Service with insurance queries (see ‘Useful organisations’ for details).
Association of British Insurers (ABI)
51 Gresham Street, London EC2V 7HQ
tel: 020 7600 3333
email: info@abi.org.uk
web: www.abi.org.uk
Represents the collective interests of the UK insurance industry, and advocates high standards within the industry. It provides a wealth of information and publications for the general public.
Financial Services Ombudsman
South Quay Plaza, 183 Marsh Wall, London E14 9SR
tel: 0845 080 1800 or 0300 1239 123 (8am–6pm, Mon–Fri)
email: complaint.info@financial-ombudsman.org.uk
web: www.financial-ombudsman.org.uk
An independent organisation that deals with individual complaints between consumers and companies that supply financial services, including insurance.
The Law Society
The Law Society's Hall, 113 Chancery Lane, London WC2A 1PL
tel: 020 7242 1222
email: contact@lawsociety.org.uk
web: www.lawsociety.org.uk
The Law Society is largely for solicitors. However, it can direct enquirers towards solicitors who specialise in disability discrimination legislation and has an online database of solicitors. The Law Society cannot give legal advice.
MDF The Bipolar Organisation
Castle Works, 21 St George's Road, London SE1 6ES
tel: 020 7793 2600
members’ support line: 0808 802 1983 (24 hours)
email: mdf@mdf.org.uk
web: www.mdf.org.uk
MDF The Bipolar Organisation is a registered charity for people whose lives are affected by bipolar disorder, providing self-help groups, information, publications and advice. It has arranged a travel insurance scheme for members, who should phone the ‘020’ number for more information.
Mind’s Legal Advice Service
PO Box 277, Manchester M60 3XN
tel: 0845 225 9393 (9am–5pm, Mon–Fri)
email: info@mind.org.uk
Can provide details of mental health solicitors.
Rethink
Head Office, 89 Albert Embankment, London SE1 7TP
advice service: 020 7 840 3188 (10am-1pm, Mon-Fri)
email: advice@rethink.org or info@rethink.org
web: www.rethink.org
Rethink is a charity working to help people affected by serious mental illness to recover a better quality of life. The website includes advice about obtaining insurance when you have a mental health problem.
The companies whose details are given below advertise insurance for people who are disabled and/or have a pre-existing medical condition and in some cases specifically make reference to people with depression or other mental health problems. However, they may wish to obtain a medical report from your general practitioner or psychiatrist.
Note that Mind is unable to specifically recommend any of the insurance services listed below; their details are given purely for information purposes.
En Route Insurance
Grove Mills, Cranbrook Road, Hawkhurst TN18 4AS
tel: 0800 783 7245 (9am-5pm, Mon-Fri; 9am-12pm, Sat)
email: info@enrouteinsurance.co.uk
web: www.enrouteinsurance.co.uk
Specialises in car and travel insurance for disabled people.
Free Spirit
PJ Hayman and Company Ltd, Stanstead House, Rowlands Castle PO9 6DX
tel: 0845 230 5000 (8am–6pm, Mon–Fri)
email: freespirit@pjhayman.com
web: www.free-spirit.com
Provides travel insurance for people with pre-existing medical conditions.
The Insurance Surgery Ltd
King Edward House, 1 Jordangate, Macclesfield SK10 1ES
tel: 0800 8496 444
email: enquiry@ the-insurance-surgery.co.uk
web: www.the-insurance-surgery.co.uk
Finds life, travel and other types of insurance for people with pre-existing medical conditions.
MIA Online Ltd
PO Box 2109, Rayleigh SS6 9WH
tel: 01268 783383
email: info@miaonline.co.uk
web: www.miaonline.co.uk
Provides travel insurance for people with pre-existing medical conditions. Also provides a service for customers to store their medical records online so that they can be accessed from anywhere in the world.
Orbis Insurance
6–8 Underwood Street, London N17 7QJ
tel: 01424 220 110
email: via website
web: www.orbisinsurance.co.uk
Provides non-standard travel and life insurance.
Platinum Financial Consulting
14 Mildmay House, Foundry Lane, Burnham-on-Crouch CM0 8BL
tel: 08450 55 95 65 (9am–5pm, Mon–Fri)
web: www.life-insurance-help.co.uk
Can provide help finding life insurance, critical illness insurance or travel insurance for people with pre-existing medical conditions.
Travelbility
Peregrine House, Falconry Court, Bakers Lane, Epping CM16 5DQ
tel: 0845 338 1638 (9am–5.30pm, Mon–Fri)
email: enquiries@travelbility.co.uk or via website
web: www.travelbility.co.uk
Provides travel insurance specifically for people who are disabled and those with a pre-existing medical condition.
The following booklet is available to purchase from Mind Publications on 020 8221 9666, from the online shop, or via publications@mind.org.uk:
[1] Read, J. and Baker, S., 1996, Not just sticks and stones: a survey of the discrimination experienced by people with mental health problems, Mind, London.
[2] Mind press release to the BBC, 1999, quoted online: http://news.bbc.co.uk/1/hi/health/358776.stm
This factsheet was originally written by Jackie Golding, and revised by Rachael Twomey, September 2005, and Martin O’Kane, November 2009.