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‘All down south from here’

Kristi and Carl were travelling in South America for six months. While in Nicaragua Kristi and Carl stayed in the picturesque little town of San Juan Del Sur for one week before heading on to Costa Rica by shuttle.

On the day of departure Kristi and Carl were packed and ready for the shuttle’s arrival at 6:00am. Kristi placed her bag just inside the gate in the hotel’s courtyard, visible from the road. Carl was in the courtyard with his pack, having a cigarette, and Kristi called to Carl to watch her stuff while she went back to her room to fetch her day-pack.

When Kristi came back, her bag was gone. Carl had been in the courtyard the entire time but had not seen anyone come or go. Kristi and Carl looked for Kristi’s bag but did not find it. When the shuttle arrived, Kirsti and Carl explained what had happened and the shuttle staff took them to a local police station where they reported the theft. The police undertook a brief search but found nothing. Kristi was given a copy of the police report and she and Carl departed San Juan Del Nur without her bag.

Kristi called her insurer to report her lost bag. She completed a detailed claim for lost clothes and accessories worth $4,600.

The insurer confirmed receipt of Kristi’s claim and asked her for further information which Kristi provided. After another week, the insurer came back to Kristi declining her claim. Kristi immediately requested a review and the insurer appointed an investigator to Kristi’s claim. The investigation took another month, following which the insurer advised Kristi that it upheld its decision to decline her claim. Kristi complained to FSCL.

Kristi’s view

Kristi’s said that her travel insurance should cover her loss as she had only been away from her bag for a minute and Carl had been watching it.

The insurer’s view

The insurer accepted that Kristi had suffered a genuine loss, however it declined Kristi’s claim saying that a specific exclusion for personal luggage left unattended in a public place applied.


We looked at the policy wording and decided it would respond to Kristi’s claim under the loss or damage to personal luggage section of the policy.

We then checked whether the insurer had fairly applied its exclusion clause. The exclusion clause the insurer relied on said the insurer would not pay for any loss of “personal luggage left unattended by you or your travelling companion in a public place, including where an item is at a distance from you that you cannot prevent it from being taken”.

The policy defined a public place as any area to which the public has access, authorised or not, and included ‘hotel foyers and grounds’. We accepted that Kristi’s bag had been inside the gate but that it was still in the hotel grounds, and was therefore in a ‘public place’.

We noted that although the policy did not define ‘unattended’, the fact that Kristi’s bag was able to be taken without Carl or anyone else noticing, supported a finding that the bag was at such a distance that it could not reasonably have been prevented from being taken.

We also reviewed the insurer’s timeliness in responding to Kristi’s claim. Under the Fair Insurance Code, the insurer has to meet specific timeframes and provide regular updates to the insured. We examined all the correspondence between Kristi and the insurer and were satisfied that the insurer had met its timeliness obligations under the Fair Insurance Code.

We noted that once the insurer had the information to complete the claims process, it did so efficiently and kept Kristi reasonably informed on the progress of her claim by email.


We issued a preliminary view explaining that the insurer had acted reasonably to decline Kristi’s claim because her bag was taken while unattended in a public place. Kristi accepted our view.  

Key insights for consumers

Words in a contract of insurance are given their usual or ordinary meanings, but any specific definitions in the policy wording are preferred over general definitions. It is important that you read the policy wording and pay attention to any exclusions that may apply to your cover. ‘Public place’ and other general words and phrases often have specific meanings in insurance contracts.