Thomas was on holiday in Hawaii with his family for a month. Early in the trip Thomas’s hat blew off his head in the wind. Thomas reached for it, overbalanced, and fell hitting his head.
A passer-by helped Thomas onto a seat and when he had sufficiently recovered he returned to his hotel.
Once back at the hotel Thomas realised he was missing one of his hearing aids. It must have fallen out when he fell and although Thomas and the family went out looking, they had no luck in finding it.
Unfortunately, because Thomas’ hearing aids operated as a pair, having one was useless. Thomas tried to get along without it but after a week, he realised he would have to get an urgent replacement.
Thomas went to a local audiologist for an examination and was issued with new hearing aids. All up, the replacement hearing aids cost just over $9000.
Thomas kept his receipt and, upon his return to New Zealand, submitted a claim for the cost of replacement hearing aids on his travel insurance policy.
The insurer reviewed Thomas’ claim, accepted that his hearing aids had been legitimately lost and agreed to pay the maximum amount under the policy for ‘electronic equipment’, which was $2000 per item. As the hearing aids were a set, they were considered a single item.
Thomas was very disappointed and asked the insurer to review his claim. The insurer reviewed its decision but upheld its declinature of Thomas’ claim. Thomas complained to FSCL.
Thomas’ view
Thomas felt his hearing aids should be covered under the policy and considered the insurer had unfairly classed them as electronic equipment.
Thomas also considered that the insurer’s agent should have done more to tell him about the need to specify high value items at the time he took out the policy.
The insurer’s view
The insurer considered that it had responded fairly to Thomas’ claim and that the sub-limits had been clear. The insurer noted that had Thomas wanted to insure his hearing aids or any other high value item he could have, but had not done so.
Review
We asked the insurer to provide us with the full policy wording and any information given to Thomas at the time of sale.
The telephone call to Thomas was not recorded, however, the insurer was able to provide its standard script which referred to $10,000 of cover being available for specified high value items and the process that needed to be followed to add high value items on the policy.
We reviewed the policy wording and were satisfied that the insurer had acted reasonably in responding to Thomas’ claim and in applying the electronics sub-limit of $2000. We noted that if the sub-limit for electronic goods was not applied then the lower sub-limit of $1500 per item would have applied. In our view, the insurer had considered the policy fairly and correctly applied its highest sub-limit.
We also noted that the insurance policy explained about high value items and the process that the insured could take to get cover for any item worth more than $1500.
Outcome
We discussed Thomas’ complaint with him and Thomas admitted that he had not read the policy. After explaining to Thomas the policy wording and the classification of the hearing aids as electronic goods, Thomas agreed to discontinue his complaint against the insurer.
Key insights for consumers
The schedule for your travel insurance will generally include a sub-limit for classes of items, such as personal baggage or electronic equipment. Many travel insurance policies have specified high value item cover which requires you to inform the insurer of the specific details of the item and insure it individually. If you are planning on taking things overseas which are worth more than the policy sub-limit, you should always specify these items to your travel insurer, this also includes any specialised equipment such as hearing aids.
