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Why Insurance Claims Get Declined in New Zealand — and What Happens If You Forgot to Disclose Something

• Amy Tao

Let me talk about the thing nobody wants to deal with: a declined claim.

Start with the part that gets lost. The overwhelming majority of claims are paid without drama. Insurers do not make their money by refusing to pay. In my own experience the New Zealand insurers are genuinely reasonable — I have handled several cases where I was privately unsure whether they would pay, and they paid.

So when claims are declined, why?

Reason 1: disclosure, which is more than 90% of it

More than 90% of declined claims come down to health disclosure at the time of application.

Not disclosing honestly

Some of it is people taking a chance, on the assumption that there are no medical records in New Zealand to find. But most people are perfectly honest with their doctor — and New Zealand doctors, GPs especially, write down everything you say, relevant or not, in your medical notes.

When you claim, the insurer may well request those notes. If they show symptoms or a condition that existed before the policy started, the claim is declined.

Why disclosing well is a skill

The other half is that there is real craft in disclosing a health history accurately and carefully — describing the true position in a way that also protects your interests takes experience and judgement.

This is exactly why I am not a fan of buying insurance online by yourself. Get the disclosure wrong and the claim becomes a dispute.

Reason 2: it is simply not covered

Claims outside the scope of the policy are not paid. Every health insurance product has a set of general exclusions, typically including:

Some insurers add their own, such as allergies, or sleep-related conditions. It is worth reading the general exclusions in your own policy. That said, the great majority of the physical health problems people actually worry about are covered.

Reason 3: a decline is not always the end

Some declined claims are worth arguing, and that is when you want a professional talking to the insurer on your behalf.

This is one of the most valuable things an adviser does — being the bridge between you and the insurer. Without one, you are arguing your own case: when you are unwell and have no energy for it, without the technical knowledge, and without knowing what to push on. And an adviser costs you nothing.

What if you genuinely forgot to disclose something?

This is the question I get from people who already have a policy in force. Maybe an old condition that resolved so long ago it slipped their mind, or a chronic issue that does not affect daily life. Will an unrelated claim now be declined because of it?

How insurers actually approach it

At application you complete a health questionnaire, and your answers are the basis on which the policy is underwritten. Medical examinations are not routine, and insurers only pull reports from your GP when they judge it necessary. Your disclosure is the foundation of the whole assessment, which is why honesty matters so much.

Here is the principle insurers apply: they do not treat one undisclosed condition as grounds to exclude every future claim, related or not. They go back to the start and ask what would have happened had the condition been disclosed then — would there have been an exclusion, and what would it have looked like?

The four possible outcomes

1. A minor condition, unrelated to the claim. If it would not have produced an exclusion anyway — nothing significant or ongoing — the claim proceeds and your policy is unchanged.

2. A significant condition, unrelated to the claim. If it has an ongoing or material effect on some part of your body, the claim still proceeds, but an exclusion for that condition is added to the policy.

3. A condition related to the claim. The claim is declined and an exclusion for that condition is added.

4. A serious condition. If it has a major, long-term effect, the claim is declined and the insurer may cancel the policy — because had it been disclosed at the outset, cover would not have been offered at all.

The takeaway

Disclose honestly when you apply. It is the single thing that most protects you later.

And if you do have a health history, do not assume you are uninsurable. There are policies in New Zealand that will cover people with pre-existing conditions — get in touch and I will work through your situation.

One last thing worth knowing: your medical notes start mattering long before you ever make a claim. Everything you tell a GP while you are still uninsured can shape what a policy will cover later. There is more on how pre-existing conditions are handled in our FAQ.

Need help with a claim or a disclosure question? Get in touch with Cornerstone Insurance.

Phone: +64 211 280 727 Email: amy.tao@cornerstonefs.co.nz WeChat: Amytaoingrace