OLYMPIA, Wash. — Attorney General Bob Ferguson has announced that Allianz, the world’s largest insurance company, must pay $1.5 million for discriminatory practices against 560 Washingtonians with mental or nervous health disorders.
The company, known for selling travel insurance to millions in the state, faced allegations of denying claims related to mental health events, a violation of civil rights laws.
Allianz, which promises to reimburse customers for trip cancellations caused by a “covered illness” or “medical condition,” had excluded mental health disorders from its coverage without adequate disclosure.
The discriminatory exclusion, labeled as “Mental and Nervous Health Disorder,” resulted in the denial of claims for Washingtonians facing mental health-related travel disruptions.
Ferguson’s civil rights lawsuit revealed instances where Allianz denied claims despite medical records supporting the mental health conditions preventing travel. Those affected included a Spokane couple dealing with a dementia diagnosis, an Olympia couple whose son’s wedding cancellation was tied to a mental health episode and a Seattle woman forced to change travel plans due to panic attacks.
As a result of the lawsuit, Allianz will pay approximately $800,000 as restitution to affected Washingtonians, covering their travel losses and premiums, along with interest. Additionally, the company will allocate around $700,000 to cover the costs of distributing financial restitution and the Attorney General’s Office investigation and litigation.
The court order includes a binding provision preventing Allianz from seeking approval to use the discriminatory exclusion from the Office of the Insurance Commissioner during the consent decree.
Ferguson emphasized the injustice of accepting claims for physical health conditions while denying those related to life-altering mental health diagnoses.
Ferguson’s investigation was initiated in 2019 and exposed Allianz’s discriminatory policy from January 2014 to February 2023 and during which 560 claims were denied based on mental health events.
The insurer failed to demonstrate a significant statistical difference justifying the exclusion, violating the Washington Law Against Discrimination, Insurance Code and Consumer Protection Act.
This victory not only holds Allianz accountable but also led to a 2023 order by the Office of the Insurance Commissioner for all travel insurers to remove discriminatory mental health exclusions from their policies.
For those whose travel insurance claims to Allianz were denied during the specified period due to mental or nervous health disorders, the Wing Luke Civil Rights Division encourages contacting them via email at travelinsurance@atg.wa.gov.
This victory marks a significant step towards ensuring equal protection for mental health conditions, reaffirming their importance under the law.
