The car was broken into and items worth $31,000 were stolen. Photo: 123RF
An insurer was entitled to decline a claim for $31,000 of items stolen from a car because the owner didn't take sufficient care to protect them, the Insurance and Financial Services Ombudsman scheme says.
The scheme dealt with about 600 disputes between customers and financial services providers in its most recent year and 96 percent were about insurance.
In one of them, a couple came back from a trip with designer clothing and jewellery in their suitcases and bags.
After dropping his wife at work, the man went home and left the bags in the car overnight.
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It was broken into and items worth $31,000 were stolen.
He claimed on his insurance but the insurer turned it down, saying leaving items overnight in the car was a failure to take reasonable care, which was a condition of the policy.
The couple had had shoes stolen from their other vehicle previously.
The man complained to IFSO, which looked at whether the insurer could rely on the reasonable care condition to decline the claim.
Its investigation found that leaving such valuable items visible in the car overnight, particularly after a previous theft, created a significant and obvious risk. The case manager noted the woman had expressly told her husband to take the items inside, and that a pair of designer sunglasses was left visible between the front seats.
IFSO said the insurer was entitled to turn down the claim because the man had taken no precautions to secure or remove the items.
"Even if you have insurance, you need to make sure you take reasonable care of your property. Our role is to make sure decisions are fair, based on the policy, and on all the facts. Unfortunately for [the man], he wasn't covered because he'd failed to meet the conditions in his insurance policy," ombudsman Karen Stevens said.
She said it highlighted the importance of understanding an insurance policy.
"The specific wording of 'reasonable care' obligations can differ depending on your insurance policy, so it's important to review your own policy document to understand exactly what's required," she said.
She said there had been a steady increase in disputes over the past three years.
"Changing expectations about what insurance should provide-especially as premiums increase-seem to be shaping how consumers feel about their insurance, and this is leading to more disputes being brought to the IFSO Scheme."
Stevens said claims were often declined for valid reasons.
"For example, someone may not have followed the conditions in their policy, or there are exclusions which apply. While this can be very disappointing for the customer, we're unable to uphold complaints where the policy has been applied correctly."
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