Finn had a credit card that included complimentary travel insurance. Before leaving for an overseas trip, he called the insurance company twice to ask about the policy terms. This included asking about the maximum amount the policy would pay out if he needed to claim. The insurer explained that the total limit was $30,000 per claim, but that there were different sub-limits in the policy. The insurer also sent Finn the policy terms so he could see for himself exactly what was covered.
When he was travelling back to New Zealand at the end of his trip, Finn lost his camera bag containing photographic equipment. He checked with the airline whether his bag had been handed in to lost and found – but it had not.
Finn then claimed on his insurance policy. His claim was for $10,000 worth of photographic equipment. This included camera bodies, lenses, and other accessories.
The insurer accepted Finn’s claim but said the amount they would pay to settle it was $2,000. They explained this was because the policy had a limit of $2,000 for claims for valuables, a term defined to include photographic equipment.
Finn said he thought his claim should be covered in full because it was less than the $30,000 limit the insurer told him about when he called. As he did not accept the insurer’s response, Finn complained to FSCL.
Finn said the insurer had told him before he left on his trip that he could claim up to $30,000 for any one event. Having looked at the policy, he saw there was a $2,000 limit for any one item or pair of items. He said it was unfair for the insurer to treat all his photographic equipment as a single item – and suggested that if he had understood this he would have made separate claims for each piece of photographic equipment.
The insurer said they had dealt with Finn’s claim in line with the policy terms. They said Finn had not specifically asked about cover for his photographic equipment when he called to ask about what the policy covered. They also explained that the reason they had limited Finn’s claim to $2,000 was because this was the most they would pay for valuables, not because they had treated his photographic equipment as a single item.
We reviewed the policy terms and found there was a limit of $2,000 for three different things – a single item, a pair of items, or valuables. The policy contained a comprehensive definition of valuables. This definition included photographic equipment. Based on this, we found the insurer had correctly applied the policy terms in saying the maximum amount they would pay for Finn’s claim was $2,000. This was not because they treated the photographic equipment as a single item. Instead, it was because the photographic equipment collectively met the definition of valuables.
We also listened to recordings of Finn’s calls with the insurer. We did this to see whether the insurer had said anything misleading or inaccurate about what the policy would cover. We concluded the insurer had responded accurately to Finn’s questions and had acted reasonably by sending him the policy terms so he could see what was covered. Crucially, Finn did not ask about cover for his photographic equipment or say anything that would alert the insurer to the fact he was intending to travel with such valuable items.
Because we found the insurer had dealt with Finn’s claim in line with the policy terms and had not misled him, we told him we could not tell the insurer to pay more than $2,000 to settle his claim. Finn did not respond to our final decision, so we closed our file.
Insights for consumers
Consumers should check carefully whether their travel insurance policy will cover any high value items they intend to travel with. It is not unusual for travel insurance policies to have limits for certain items, particularly electronic or photographic equipment. A consumer may be able to specify certain valuable items and pay an additional premium to cover those higher value items.
When asking an insurer about what a policy covers, consumers should also be as specific as possible. This helps the insurer to give the consumer the right information that applies to their situation.