Brooke Duggan knew there was something seriously wrong with her when she could not do simple things like slicing up fruit and vegetables.

What is scleroderma? Scleroderma means "hard skin" and is a disease of the body's connective tissue

Scleroderma means "hard skin" and is a disease of the body's connective tissue The most common symptom is a thickening and hardening of the skin, particularly of the hands and face

The most common symptom is a thickening and hardening of the skin, particularly of the hands and face The connective tissues of people with scleroderma have too much collagen, causing hardening and tightening of this connective tissue

The connective tissues of people with scleroderma have too much collagen, causing hardening and tightening of this connective tissue Many different areas of the body can be affected by scleroderma, and symptoms vary greatly from person to person

Many different areas of the body can be affected by scleroderma, and symptoms vary greatly from person to person Anyone can develop scleroderma, but it is more common between the ages of 30 and 60, and three times more likely in females

Anyone can develop scleroderma, but it is more common between the ages of 30 and 60, and three times more likely in females There are estimated to be over 5,000 Australians living with scleroderma Source: Better Health

"I couldn't cut up fruit because I didn't have the strength in my hands," she said.

After the 41-year-old from Wononora in Sydney's south collapsed while running, she went to see a range of doctors and medical specialists.

Eventually, she was diagnosed with a severe form of an auto-immune disease called scleroderma.

Her health continued to deteriorate until she only had a quarter of her lung capacity left.

Her doctors, including Dr John Moore from Sydney's St Vincent's Hospital, decided Ms Duggan needed a risky but potentially lifesaving stem cell treatment, using her own cells.

"The skin tightens on the trunk and around the chest wall, you get scarring on the lung and it becomes more and more difficult to breathe," he said.

"Life becomes more difficult for those patients."

She had a life insurance policy with BT Financial, a subsidiary of Westpac, which she thought covered her for serious health procedures like bone marrow or stem cell transplants.

The scleroderma caused scarring on Ms Duggan's lungs. ( Supplied )

The policy was written in the 1990s.

In those days, stem cell or bone marrow transplants involved transplanting cells from one person to another.

But these days, scientific breakthroughs mean that for patients with severe scleroderma like Ms Duggan, doctors can use the patient's own cells.

A BT spokeswoman said the company was unable to comment on an individual case that was subject to court proceedings.

"We are committed to helping our customers with their insurance needs, and fulfilling our contractual promise to pay claims under the terms of our policies, which saw us pay $245 million in claims in 2014/15," she said.

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Stressful and 'out of pocket'

Ms Duggan said the whole episode had taken its toll on her and her family, both emotionally and financially.

Ms Duggan at her very worst after having stem cells transplanted, enduring very high temperatures and an full body rash. ( Supplied )

They have had to sell their first house to pay for her medical expenses.

"I think I would be out of pocket about 20, 30, or even 40,000 thousand dollars," she said.

She is now taking her insurer BT to court.

"There are hundreds probably thousands of people out there who have policies or claims declined by insurers who don't have the capacity or mental strength to see through a legal process to see justice prevail," said Travis Schultz from law firm Slater and Gordon, which representing Ms Duggan.

Ms Duggan has had to pay thousands of dollars to see a variety of medical specialists.

The stem cell treatment she received at St Vincent's Hospital was part of a clinical trial, so the cost was borne by the hospital.

A new lease on life

Ms Duggan had the transplant three months ago and it has had a remarkable improvement in her health.

"It's made a huge difference. I feel so much better. I really feel amazing," she said.

She still struggles a little with her breathing but is able to work, look after her kids and even help out in her husband's new cafe.

"It's given me a new lease of life," she said.

Her hope now is that other patients don't have to go through the same ordeal to have a chance of a healthy life.