Jessica was planning a trip to see family in Latvia and wanted to take a ring and a bracelet, worth $10,000 each, with her. Jessica asked her travel agent to arrange insurance cover for both items. The travel agent arranged cover, for an additional premium of $400.
While in Latvia, at 11pm one night, Jessica was walking in the snow from the train station to stay with family in a remote village. Jessica slipped in the snow and dropped her handbag containing both items. Jessica looked for the bag but could not find it in the dark. She returned the next day but still could not find it. Jessica reported the theft to the police about three days later when she returned from the village, because there was no police station in the village.
When Jessica returned to New Zealand, she made an insurance claim for the loss. The insurer declined the claim saying the policy only covered lost jewellery if the jewellery was:
- being worn at the time of the loss
- in the same room as Jessica at the time of the loss
- stolen from a locked safe.
Jessica did not accept the insurer’s decision and complained to FSCL.
Jessica accepted that the loss was not covered by the policy but said that she specifically asked the travel agent for a policy that would cover her jewellery while it was in a bag. Jessica said the travel agent had led her to believe the policy was suitable for her needs. As a compromise, Jessica said that if the insurer agreed to refund the additional $400 premium she paid to have the jewellery insured, she would relinquish her claim for the full $20,000.
The insurer contacted the travel agent, who arranged the policy extension, for comment. The travel agent, and her manager, remembered the conversation with Jessica. Both the travel agent and the manager could not recall Jessica asking for insurance that would cover her jewellery while it was in Jessica’s luggage.
The insurer declined to refund the additional premium paid.
We confirmed that the policy did not cover Jessica’s loss in these circumstances and that the insurer was entitled to decline the claim.
We then considered whether Jessica had been misled by the travel agent and whether the Consumer Guarantees Act 1993 applied. If Jessica had told the travel agent that she needed an insurance policy that would cover her jewellery while it was in her luggage, and the travel agent provided her with a policy that would not achieve this particular purpose, the insurer could be liable for this loss.
We accepted that when Jessica asked the travel agent to arrange insurance for her jewellery, she expected that the jewellery would be insured at all times, regardless of whether she was wearing the jewellery or if it was in her bag. Although Jessica was adamant that she had asked for specific insurance cover, there was no evidence to support this. On balance, it seemed unlikely that Jessica asked the travel agent to arrange cover for her jewellery specifically while it was in her bag.
As we had insufficient evidence to find that Jessica had been misled, or provided with unsuitable cover, we found that Jessica should discontinue her complaint. Jessica did not accept our decision but did not provide any further evidence, so we discontinued our investigation.
Insights for consumers
If you are travelling overseas with very expensive jewellery you should read your policy wording carefully. If you are not sure about the extent of your cover, you should contact your insurer for advice before you travel.