The story
Paul arranged travel insurance to cover him until 21 August with Big Apple Insurance. Paul and his partner Amy had been living in an apartment in New York and decided to visit New Zealand on their way to Spain. As Paul would not need his formal suits while holidaying in New Zealand, he left them with the apartment concierge in New York on 1 July.
Amy and Paul arrived in New Zealand on 7 July and returned to New York on 24 July where they discovered the concierge had disposed of the Paul’s suit bags on 20 July. The concierge had not told Paul the apartment would hold former residents’ bags for only 10 days.
Dispute
Claim declined – loss outside Period of Insurance
Paul claimed for the accidental loss of his bags with Big Apple Insurance. Big Apple Insurance declined Paul’s claim because the loss occurred on 20 July outside the Period of Insurance. Big Apple Insurance referred to the policy document saying the Period of Insurance ended when Paul returned to his normal place of residence in his Country of Origin, New Zealand, on 7 July.
Paul’s response
Paul did not accept Big Apple Insurance’s decision, saying the event causing his loss occurred on 1 July, during the Period of Insurance, when the concierge did not tell him about the apartment’s policy of holding bags for only 10 days.
Alternatively, if the loss did occur on 20 July, Paul said this loss was also during the Period of Insurance. Paul said he had not lived in New Zealand for 7 years, and so was not returning to his normal place of residence. The policy must remain valid until 21 August.
Big Apple Insurance explained that when Paul purchased the policy he would have specified a country of residence. If Paul had not lived in New Zealand for 7 years he should not have selected New Zealand as his country of residence. If Paul had selected any country other than New Zealand he would not have been able to purchase the policy. The policy would never have existed, and there would be no cover.
FSCL’s review
We reviewed Paul’s complaint and considered Big Apple Insurance was entitled to decline Paul’s claim either because:
- New Zealand was not Paul’s country of residence and he was not eligible for the policy or
- New Zealand was Paul’s country of residence and he returned home on 7 July, ending the Period of Insurance, before the loss occurred on 20 July.
Paul not resident in New Zealand
If Paul was not resident in New Zealand he should not have been able to purchase the policy. The policy would have to be treated as having never existed, and Big Apple Insurance had no liability for Paul’s loss.
Paul resident in New Zealand
If Paul was resident in New Zealand when he purchased the policy, the Period of Insurance ended on 7 July when he returned to his normal place of residence in his Country of Origin. Normal place of residence was not defined in the policy, but Country of Origin was defined as ‘the country in which you principally resided prior to applying for cover’.
By selecting New Zealand as his country of residence, Paul’s Country of Origin had to be New Zealand. Although Paul may no longer have had a normal place of residence, he had provided us with a New Zealand address. To give effect to the policy, we treated the New Zealand address as his normal place of residence.
Loss occurred outside Period of Insurance
Although Paul left the bags with the concierge on 1 July the bags were safe and not lost until disposed of on 20 July. The accident causing the loss therefore occurred on 20 July, after Paul had returned to New Zealand and outside the Period of Insurance.
Outcome
We agreed that Big Apple Insurance was entitled to decline Paul’s claim and recommended he discontinue his complaint.
