Does trauma insurance pay if a covered condition was diagnosed before policy start?

No. Trauma cover does not pay for conditions diagnosed before the policy's effective start date. Non-disclosure of a pre-existing condition is one of the leading causes of declined claims. This is general information, not personal advice.

The pre-existing condition rule

A pre-existing condition is any medical condition you had been formally diagnosed with, were experiencing symptoms of, or were receiving treatment for at the time you applied for cover. The rule applies across all retail trauma cover on the panel.

Claims are typically not paid where:

• The condition was formally diagnosed before the application date.
• You were experiencing symptoms or under investigation when you applied.
• You should reasonably have suspected the condition based on your medical history.
• The condition was disclosed and then specifically excluded from cover.

Three things that can happen during underwriting

When you disclose a pre-existing condition at application, the insurer may:

• Accept at standard rates if the condition is minor, well-controlled, or unlikely to lead to a covered event.
• Apply a premium loading (a higher rate) reflecting the elevated risk.
• Impose a specific exclusion on the condition itself or related conditions, often time-limited (12 to 24 months) or permanent depending on severity.
• Decline cover if the risk is too high.

For example, a history of heart disease may attract a cardiovascular-related exclusion. A history of cancer may attract a future cancer exclusion for a specified period.

Your duty to disclose

The Insurance Contracts Act 1984 (Cth) sets a statutory duty on the applicant. Since 5 October 2021, this is the duty to take reasonable care not to make a misrepresentation (Section 20B), which replaced the older duty of disclosure for consumer insurance contracts. The duty requires honest, complete answers to the specific questions asked in the application, including:

• Past medical conditions and treatments
• Current symptoms and ongoing health issues
• Family medical history (where asked)
• Lifestyle factors (smoking, alcohol, exercise, dangerous hobbies)

Non-disclosure of a material condition gives the insurer rights to:

• Refuse the specific claim (under Section 28 of the Insurance Contracts Act).
• Reduce its liability to the position it would have been in had disclosure occurred.
• Avoid the policy entirely if the non-disclosure was fraudulent (Section 28).

The Insurance Contracts Act 1984 (Cth) governs these rights. Sections 20B, 28, 28A to 28D, and 29 set out the duty, the insurer's remedies, and the duty of utmost good faith.

The 90-day qualifying period adds a separate barrier

Even if you disclose every condition honestly, most panel trauma policies include a 90-day qualifying period from the policy's acceptance date. Claims for cancer, heart attack, stroke, and coronary artery bypass surgery diagnosed in the first 90 days are generally not paid, regardless of whether the condition was previously known.

The 90-day rule discourages applications timed against a suspected impending diagnosis. See the related FAQ on the 90-day qualifying period.

What to do at application time

• Read each application question carefully and answer honestly.
• Disclose every condition, treatment, or symptom even if it seems minor or resolved.
• Provide complete medical history when asked.
• Ask for written confirmation of any exclusions or loadings applied.
• Keep a copy of your application and the insurer's decision documents.

Declined claims years after policy start due to undisclosed conditions are a known pattern. APRA and ASIC publish this trend in their Life Insurance Claims and Disputes Statistics series. Honesty at application is the most reliable way to protect a future claim. Speak with a licensed adviser if you are unsure how to disclose a complex medical history.