Trouble in paradise
In October 2015 Brendon purchased a travel insurance policy to provide cover during his diving trip to Curaçao in mid-October 2015. Brendon was very excited to go diving in Curaçao and to explore some nearby shipwrecks.
Brendon arrived in Curaçao and took a bus transfer to his hotel. The bus stopped in front of another hotel to let off some other passengers. Brendon noticed that the bus driver had removed his suitcase and left this with some other disembarking passengers and their luggage.
Brendon quickly exited the bus to retrieve his suitcase but left his carry-on bag unattended on his seat. Unfortunately, by the time Brendon had retrieved his suitcase; the driver had returned to the bus and driven off before Brendon could get back on the bus.
Brendon chased after the bus but the driver did not stop. Brendon walked to his hotel and explained to the hotel staff that he had lost his carry-on bag which also held his credit card. Brendon reported the lost carry-on bag to both the local police and the tourist police.
Brendon had prepaid his hotel and dive trips but otherwise he was limited solely to the cash on his person, so he did not enjoy his holiday as much as he would have liked.
After returning home, Brendon put in a claim to his insurer. Brendon’s claim for lost items in his carry-on bag came to $17,839. Brendon included evidence for some of his lost items but not for all. The insurer received Brendon’s insurance claim on 8 November 2015.
An investigator appointed by the insurer completed a thorough interview with Brendon via Skype. Brendon provided as much supporting evidence as he could to prove ownership of the expensive clothes and jewellery that he claimed were in his carry-on bag.
After receiving the investigator’s findings, the insurer declined to pay Brendon’s claim. The insurer said that Brendon had given inconsistent and false statements during his interview with the investigator, and that Brendon’s answers to simple questions contradicted his claim form and the other evidence of his loss.
The insurer also said that Brendon’s claim could have been declined because he had failed to take reasonable care of his belongings and had left them unattended in a public place.
Brendon complained to FSCL.
Brendon felt that the insurer had acted unreasonably in appointing an investigator for a simple travel claim. Brendon’s view was that the insurer was going to outrageous lengths not to pay his claim.
Brendon considered that he had been truthful and that he had been unfairly treated by the insurer. Brendon also thought the insurer had unfairly prolonged the claims process and had not complied with its timeliness obligations.
Brendon felt that he had taken reasonable steps to prevent the loss. Brendon wanted the insurer to accept and pay his claim of $17,839.
We found that the insurer had followed standard industry practice by appointing an investigator where a claim was of high value and there were discrepancies in the evidence in support of the claim.
We reviewed the interview recording and all calls and correspondence between Brendon and the insurer and considered that Brendon had been treated respectfully and reasonably by the investigator and insurer.
We found that the insurer had complied with its timeliness obligations and had kept Brendon reasonably informed on the progress of his claim at all times. We noted that there had been a delay before Brendon was interviewed; however, we considered that the delay was justified as the investigator had to be appointed, some further information had to be collected, and a suitable time for the interview with Brendon had to be organised.
We agreed with the insurer there were inconsistencies in Brendon’s story of his loss and subsequent actions, notably:
- Brendon’s hotel was unable to corroborate that he had told them that he had lost luggage on arrival.
- Brendon’s description of the hotel and area where he got off the bus did not match the name of the hotel he had given.
- Brendon had advised the insurer during a call that he had arranged for his mother to make a money transfer to him, however, he later confirmed that no money transfer had been arranged or received.
- Brendon said that he had lost a visa debit card and that he had cancelled the card and had a new one issued to him in Perth. When asked to send details of the lost items to the investigator, Brendon sent a photo of the supposedly lost card that had been taken a few days earlier. When asked, Brendon confirmed that his card had not been lost or replaced.
Decision to decline claim is reasonable
On the balance of probabilities, we considered that Brendon’s loss was genuine. However, we considered that the insurer’s decision to decline Brendon’s claim was reasonably available to it.
We noted that Brendon had clear obligations under the policy to comply with the insurer’s reasonable requests to provide all information and also to ensure that all statements in support of his claim were correct.
We found that, on the balance of probabilities, Brendon knowingly provided the insurer with false and misleading information in support of his claim. Brendon explained that he had been stressed by the experience and had also been on medication which could have accounted for inaccuracies in his statement. We accepted that this could be an explanation; however, it did not absolve Brendon of his duty to be accurate and truthful.
We also considered that Brendon’s claim could have been declined by the insurer because he had left his carry-on bag in a public place at a distance from which he could not prevent it from being taken. We felt that Brendon failed to take reasonable precautions to protect his property and that, in the circumstances, Brendon took an unreasonable risk in not taking his carry-on bag with him when he left the bus.
We were satisfied that the insurer had acted fairly and reasonably throughout its investigation of Brendon’s claim and its decision to decline Brendon’s claim was reasonably available to it. We recommended that Brendon discontinue his complaint which he accepted.
The duty of good faith means that you must be truthful in your claims and in all supporting evidence to your insurer. If you are not truthful, or otherwise give inconsistent statements, your insurer may be able to decline an otherwise valid claim. It is very important to be truthful at all times and to ensure your claim and supporting evidence are correct.