Insights for consumers
When making a claim on your insurance policy for lost or stolen goods, the insurer will often ask for proof of ownership and evidence of the value of the goods.
If you cannot provide proof of ownership of and the value of lost goods, the insurer may decline the claim or make a settlement offer for less than the amount claimed. This makes it important to retain receipts and other evidence of goods and their value.
For a business, retaining evidence of ownership of goods in the asset register is sensible.
What happened?
Contractors from Rob*’s plumbing firm were working on a building site when it was broken into. Equipment belonging to Rob’s firm was stolen.
Rob made a claim on the firm’s insurance policy. The insurer asked Rob to complete a schedule of loss and provide receipts for the stolen items. Rob provided a schedule of loss for 18 items and some receipts. His claim amount was $20,000.
The insurer made a settlement offer of $10,000 based on the information Rob provided.
Rob did not think the offer was fair as it did not cover his losses. The insurer was not prepared to increase the offer, and Rob complained to FSCL.
What was FSCL’s view?
We reviewed the schedule of loss and the receipts Rob had provided.
The insurer said it was not possible to reconcile the schedule of loss with the receipts. The more valuable items on the schedule did not have receipts. The insurer felt they had made a generous settlement offer, given the lack of information about the stolen items or their replacement costs.
Rob explained that some of the items came from the previous business owner, and had no receipts for these. He was not able to provide photographic evidence of the items; he only had a photo of the empty toolbox after the theft.
We noted that it was usual practice for an insurer to require receipts for goods stolen, so the insured could prove they owned the goods as well as their value. An estimate from the insured person based only on their recollection will not generally be sufficient to establish ownership of the goods or their value.
As Rob was not able to prove that he had lost goods to the value of $20,000, we were not able to say the insurer was obliged to pay him more than it had offered.
How did FSCL suggest that the complaint should be resolved?
Rob reluctantly accepted what we had to say, and accepted the insurer’s offer to settle the claim.
