Mark loved to travel so when he heard about a music festival with his favourite artist headlining, he decided to go to the UK to attend. On his first night there, Mark went out for dinner and drinks, where he met a few locals, and invited them back to his hotel room for another drink.
Once he arrived at his room Mark changed into more comfortable clothes, leaving his jewellery and a phone on his bedside table. After a short time, Mark fell asleep, due to the combination of jetlag and alcohol before the guests had left.
The next morning Mark discovered that his jewellery and mobile phone were missing. He suspected that one of his guests might have taken it and reported it to the local police.
Mark made a claim with his travel insurer.
The insurer declined Mark’s claim and he complained to FSCL.
Dispute
The insurer said that it had declined Mark’s claim because:
- Mark’s actions were negligent.
- He did not take reasonable precautions for the safety and supervision of his jewellery and mobile phone.
Mark disagreed with the insurer and said that
- It was not enough for the insurer to say that he was negligent.
- The insurer had to prove that his actions were reckless, which meant that he should have reasonably known that he was running a risk by inviting some people he did not know well to his room.
- Because he regularly travelled overseas, and it was not the first time he invited new friends back to his hotel room, he could not have reasonably known that he was running a risk.
- The circumstances surrounding the theft were outside his control.
Review
Most travel insurance policies place an obligation on the insured person to take reasonable care of their belongings and luggage while travelling. For an insurer to justify declining a claim on the breach of a reasonable care or reasonable precaution condition, the insurer has to show that the conduct of the insured was reckless or grossly irresponsible.
This means that the insurer had to show either that:
- Mark was reckless, in the subjective sense, in that the claim arose from a risk that Mark recognised should not have been taken, but took anyway, or
- Mark was reckless, in the objective sense that the claim arose from a risk that any ordinary person would have recognised should not have been taken.
It was our view that Mark was reckless, in the objective sense, in that an ordinary person would have recognised the risk should not have been taken, because
- Mark invited strangers to his room while he was intoxicated and experiencing jetlag.
- Mark placed his jewellery and mobile phone on his bedside table, where anyone had access to it, rather than locking it in a safe or suitcase.
- He fell asleep before making sure everyone had left her room.
The fact that it was not the first time that Mark had invited “new friends” to his room did not change our view.
Resolution
We said that Mark should discontinue his complaint because the claim was clearly excluded from cover, and we did not think it would be fair for the insurer to be required to pay the claim. Mark agreed to do so.
Insights for consumers
It is important to remember that the purpose of insurance is not to provide cover in every possible circumstance, but rather to provide cover for events you could not have reasonably foreseen and took every precaution to prevent. If you are travelling with valuables, lock them in a safe place.
