Disputes over COVID-related insurance becoming more common

Tian Shengjie
COVID-19 insurance has proved difficult recently with many claims being lost in awkward wording, difficult to prove circumstances and seemingly complex legal loopholes.
Tian Shengjie

A Chinese netizen said on Thursday in a video that he had bought a COVID-related insurance product from China Life Insurance (Group) Company. After he tested positive, he alleged, but the company refused to settle his claim, saying that the Omicron virus he contracted was not COVID-19 but the flu.

According to the contract, flu was excluded from the extent of compensation.

On Friday, the company told China Banking and Insurance News that it had contacted the customer and it was under investigation. But it didn't mention whether any of its staff members had said that Omicron was not COVID-19.

The company said the man had bought several of its insurance products, some of which were related to COVID-19.

The company further claimed that it hadn't yet received relevant materials from the man applying for compensation. It said only a policyholder infected with Omicron for the first time with severe or critical illness can be compensated. Mild and asymptomatic cases and multiple-infection cases are not covered.

Insurance disputes related to COVID-19 are common recently.

Some district-level courts, such as those in Shanghai's Minhang and Baoshan, told Shanghai Daily on Friday that they had received many relevant litigations, which were all under further investigation.

Due to changing quarantine policies, COVID-related insurance products offered by many companies have been withdrawn, such as digital retailer Meituan and the health-care arm of Chinese e-commerce giant JD.com.

These products claimed that the insured can get various benefits if they were put under quarantine, diagnosed with COVID-19, or sick because of COVID-19 vaccines. According to a Shanghai Daily report in March, insurance companies had developed nearly 60 "quarantine insurance" products in total.

Many people who are inexperienced in buying insurance rush to pay without checking the contract clearly and some insurance companies play "nicely" with words to try to reduce possible compensation.

In February and March, the national and Shanghai banking and insurance regulatory authorities issued emergency notices to require these companies to "clean up" their business and publicity activities and remind consumers of compensation clauses before purchasing.

Vague definition

Shawn Wu, a financial industry practitioner who often travels on business, spent over 100 yuan (US$14.35) on quarantine insurance in March. The contract said that if he was quarantined, he could get 500 yuan a day.

"Before I paid the money, I carefully read the terms," Wu said.

He returned to Shanghai after a recent business trip and was quarantined according to government policies, but he did not receive compensation. The reason was that no destination of the insured could be a high- or medium-risk area.

"Although there were medium-risk areas in Shanghai at that time, there was no such area in the district where I live," Wu said. "The definition of the 'destinations' is vague."

Many of his colleagues bought such kinds of insurance as well, but so far only two of them have been compensated.

"They spent a lot of time preparing the documents and certifications," Wu added.

In the contract, there is no compensation in certain other situations. For example, the insured cannot be compensated if they are quarantined at home or know they need to be isolated before arriving at some places.

Wu said he would not go to court because 100 yuan was nothing to him.

"Buying these kinds of insurance sometimes is equivalent to gambling," Zou Yi with a bachelor of laws said. "Some speculators expect big returns with small investments."

In March, free COVID-19 vaccine insurance was included in Zou's car insurance. The staff of an insurance company claimed that he could be compensated if there were adverse consequences due to the vaccine.

"It's hard to get a claim because it can't be proved that the vaccine is the direct cause of some adverse consequences," he said.

The China Banking and Insurance Regulatory Commission said in September that there were 2,434 complaints about disputes about such kinds of insurance, accounting for 24.22 percent of all insurance complaints in the second quarter of this year.

Special Reports