Insurance discrimination – your rights if you have a mental health condition

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Insurance discrimination – your rights if you have a mental health condition

Often insurance companies do not seem to know how to deal with the complexities of mental health. They may say you present a high level of risk if you have or had a mental illness, and may not take your individual circumstances into account.

You have rights if an insurance company rejects your claim, denies you cover or asks you to pay a higher premium because of your mental health.

What the law says

Commonwealth and state laws say that it is wrong to discriminate against someone on the basis of a disability, which includes a mental illness, unless certain conditions apply.

An insurance company can only discriminate against you if their decision:

  • is based on reasonable actuarial and statistical data and
  • is reasonable, taking into account that data and other relevant factors, for example the type of illness, its severity, how much it impacts you, and your treatment or recovery plan.

Even with these laws in place, many insurance companies may not use the right data or consider the full range of relevant factors in dealing with people who tell an insurer about their mental health.

Different types of discrimination by insurers

Discrimination by an insurance company can happen when:

  • you tell an insurer about your mental health condition when you apply for cover and it refuses to insure you or charges you a higher premium
  • you are offered insurance but on terms that mean you cannot make a claim arising from any mental health condition, not just the mental health condition you have been diagnosed with
  • your insurer rejects your claim because it relates to your mental health
  • your insurer cancels your policy because it believes you did not tell them about your mental health symptom or condition.

Ella Ingram

Ella’s story

I started to feel really unwell and depressed, and began seeing a psychiatrist. I was diagnosed with severe depression and was hospitalised for two weeks. This was after my school trip to New York had been booked and paid for, and my school had chosen a travel insurance company to cover the trip.

On medical advice I had to cancel my trip. I was devastated that I couldn’t go to New York with all of my friends from school, but I was too unwell.

My mother and I tried to get our money back. The insurance company rejected my claim and refused to reimburse the costs because it said it could.

At first it was just about getting the money back, but then it became so much more when I realised how widespread this issue is. I didn’t ask to become depressed and I don’t feel it is fair.

Get help

Ella found it confusing knowing which legal option was the best for her. That's because discrimination law is complex. It is important to get legal advice before lodging a complaint.

Victoria Legal Aid

If you live in Victoria, call us for free information about insurance discrimination, your legal options and how we can help you.

If we can’t help, we can refer you to other organisations that can.

Public Interest Advocacy Centre

If you do not live in Victoria, you can contact Laura Lombardo at the Public Interest Advocacy Centre. The centre provides free legal advice and, if appropriate, representation in relation to complaints about insurance companies denying cover or rejecting claims because of mental health.


If you, or someone you know, is experiencing depression or anxiety or just going through a tough time, you can call, chat or email the beyondblue from anywhere in Australia.

Find out more about beyondblue and Mental Health Australia’s program to reduce discrimination in insurance for people with a history of a mental health condition.

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