Alyssa arranged insurance for her yacht. One day, as Alyssa approached the yacht, planning on a day’s sailing, she noticed the boarding ladder was down. When she got on board, Alyssa discovered the usually locked hatch was open and someone had stolen some personal belongings, including dive equipment, alcohol, and a camera.
Alyssa reported the theft to the police and lodged a claim with her insurer. Given the saltwater conditions, the police were unable to lift any usable fingerprints. The insurer’s assessor was also unable to find any evidence of forced entry. It seemed most likely that either the cabin was unlocked, or the thief had been able to pick the lock.
The insurer agreed that Alyssa had been the victim of theft but declined the claim saying that the policy did not cover the theft of cameras or alcohol and that the dive equipment would only be covered if there was evidence of violent, forced entry to the yacht.
Alyssa said that, when she purchased the policy, she understood that if someone broke into her yacht and stole her stuff, her insurer would compensate her for this loss. The fact that the lock was undamaged was not relevant because everyone accepted that she had been broken into.
We explained that the insurer’s obligation to compensate Alyssa for her loss was found in the insurance policy.
Under the insuring clause of the policy, the insurer agreed to compensate Alyssa for any loss arising from theft from the yacht. However, before accepting the claim the insurer was entitled to consider whether any exclusion clauses applied.
The policy wording excluded cover entirely for cameras and provisions, which included alcohol. The policy covered dive equipment, provided it was stolen from a lockable part of the yacht and there was evidence of violent, forced entry.
We explained our view that the insurer was entitled to rely on these policy exclusions to decline Alyssa’s claim. Even if the thief had picked the lock, this was not either forced or violent entry, meaning that the policy wording was not met.
Alyssa did not accept our view so we issued a final decision recommending that the complaint was not upheld.
Insights for consumers
All insurance policies will include insuring clauses, setting out the circumstances where an insurer will provide cover, and exclusion clauses, where the insurer will limit the extent of the risk they are prepared to insure. We suggest that consumers read the policy carefully to check they are satisfied with the extent of cover.