Ashish travelled to India to visit his family and attend a wedding. When Ashish was returning to New Zealand, he took a taxi to Mumbai’s airport. He had a number of luggage items with him which he loaded onto a trolley.
When Ashish entered the airport he realised that he had left his laptop bag on the taxi’s back seat. The laptop bag contained his HP laptop and a brand new Samsung smartphone. By the time Ashish realised he did not have his laptop bag with him, the taxi had gone.
Ashish submitted a claim to his travel insurance company totalling $2,388.
The insurance company declined Ashish’s claim because the policy specifically excluded cover for lost items where the items had been left behind in “any aircraft, ship, train, taxi or bus”.
Ashish’s complaint
Ashish considered the insurance policy to be fraudulent because he believed there was no circumstance where a person could lose an item, such as a laptop, and it would be covered under the insurance policy.
Further, Ashish considered that the policy’s table of benefits was misleading as it said that the policy covered damaged, stolen and lost items up to a value of $5,000. Ashish’s view was that the table of benefits should not say that the insurance policy covers “lost” items, as the policy excludes all avenues in which a person could lose an item such as a laptop.
Ashish said that the table of benefits should indicate to the customer what is contained in the policy wording and that he should not be expected to read the policy word for word.
Review
We found that the insurance company had correctly applied its exclusion clause and was entitled to decline Ashish’s claim.
We agreed with Ashish that the insurance company’s exclusion clause for lost items was very wide, and it was difficult to envisage a circumstance where the insurance company would accept a claim for a lost laptop. However, we did not accept the policy was fraudulent.
An insurance company is entitled to exclude cover in a policy as it sees fit. If a customer does not accept the terms cover the customer can choose not to take out the policy. An insurance company is not acting fraudulently by limited the scope of its cover.
The table of benefits was a summary of the maximum amounts the insurance company would pay for each section. At the bottom of the table it said: This is a summary only of the cover provided under the policy. For full details (such as conditions, limits and exclusions) please read the policy wording.
The insurance policy was made available to Ashish before he bought it. It was up to Ashish to read the policy to check the cover offered was suitable for his travel and personal requirements.
Our insight
No insurance policy will cover a person for every loss or expense that may arise. The insurance policy sets out for each benefit the circumstances where it will and will not accept a claim. Unfortunately, to make an informed decision about the level of cover being provided, you will need to read the policy wording. It is not enough to rely on the table of benefits.
