Don’t drink and travel? No insurance cover when intoxicated

The story

In March 2014, Jake was in transit in Kuala Lumpur, Malaysia. He was travelling to the United Kingdom where he intended to live for a period. On the night of 1 March 2014, Jake left his hostel to look around Kuala Lumpur.

Jake remembered leaving a bar around midnight and walking towards his hostel with a man he had met at the bar. The man Jake met said they should buy a beer from a convenience store. Jake bought the beers with his credit card. Jake said that the man opened the beer, although he did not see him do this. Jake said that about 5 minutes after he had the beer he was stumbling and could not stand up.

The next thing Jake remembered was that he was naked and in an alley. Jake said he remembered coming around and realising that he had been whipped. His clothes, wallet driver’s licence, cash, shoes, glasses and watch had been stolen. Jake was taken to the police station where he made a statement. Jake also went to hospital where the wounds from the whipping were treated. Jake did not have to pay for the hospital treatment he received and no blood tests were taken.

Jake submitted a claim to his travel insurer, SIP Insurance (“SIP”) for the stolen items, totalling $1,798.20 NZD.

 

SIP’s view

SIP declined Jake’s claim because it considered that Jake was intoxicated at the time he suffered a loss. SIP relied on a clause in the insurance policy which excluded cover for claims that arise directly or indirectly from being under the influence of intoxicating alcohol.

SIP stated that Jake had taken Zopiclone (a sleeping pill), 12 hours prior to the night he went out in Kuala Lumpur. SIP’s medical team advised that it is not recommended that alcohol is consumed while taking Zopiclone. SIP also stated that Jake was taking Fluoxetine (an anti-depressant), which also warns against the use of alcohol.

SIP said that Jake had provided no evidence to corroborate his allegation that his drink was spiked. SIP said that although Jake attended a local hospital in Kuala Lumpur, he could not provide a medical report.

SIP accepted Jake had been mugged and that he had suffered a very traumatic experience. However, because Jake was under the influence of alcohol at the time the event occurred, there was no cover under the policy.

 

Jake’s view

Jake believed that SIP’s decision to decline his claim on the basis that he was intoxicated was incorrect. He said he did consume alcohol but he was not ‘intoxicated’, rather, his drink was spiked by the man he met in the bar. Jake said that after consuming 4 pint sized beers on the night of 1 March 2014 he was still well aware of his actions. He also said that he does not suffer side effects when he consumes alcohol while on his anti-depressant medication and that he took the sleeping pill 12 hours prior to the events, meaning it would have been out of his system by the time he consumed alcohol.

Jake argued that the cause of his loss was a decision by other people to attack him.

 

FSCL’s view

Balancing the evidence, we considered that Jake’s claim should be covered.

We had to assess whether Jake satisfied the policy’s insuring clause. The relevant insuring clause required that the personal effects and cash had been stolen and that the insured had to report this to the police within 24 hours.

We found that Jake had satisfied the insuring clause. SIP did not dispute that Jake had been mugged and Jake reported the mugging to the police within 24 hours.

As Jake satisfied the insuring clause, to exclude Jake’s claim, SIP had to prove that an exclusion clause under the policy applied. The policy wording stated that there would be no cover if Jake’s claim arose directly or indirectly from, or was anyway connected with, Jake being under the influence or effect of any intoxicating alcohol. Because there were no tests undertaken, SIP would never be in a position to prove through medical evidence how much alcohol Jake consumed on the night of 1 March 2014. SIP would also never be in a position to prove whether Jake’s drink had been spiked and whether there had been a drug in Jake’s system.

We only had Jake’s evidence, that he consumed 4 beers at the bar and the beer at the convenience store. In our view this amount of alcohol was not enough to intoxicate a person to the extent described in the police report. Also, people who spike drinks can be highly skilled at doing so undetected, this is why people often fall victim to their drink being spiked.

In balancing the evidence, our view was that SIP had not proved that the exclusion clause applied in the circumstances of Jake’s claim. We recommended Jake’s claim for $1,798.20 NZD was upheld.