Jeremy wanted to take his bike overseas to compete in a triathlon. He found a link to a broker on a website that gave some information about possible travel insurance cover: “Damage to bike and bike accessories while in transit (bike and accessories must be correctly packaged in a suitable protective case or in locked premises)”. The broker emailed a certificate of insurance to Jeremy stating that the policy included cover for damage to bikes, subject to the terms and conditions of the policy. Jeremy did not read the policy before leaving.
When Jeremy returned home from the competition his bike was damaged and cost $6,890 to repair. The airline agreed to pay Jeremy $2,096.86 for the damage. Jeremy then made a claim to his insurer for the balance of his loss. The insurer declined the claim because the policy stated that the bike needed to be packed in a hard case. Jeremy’s case had a metal frame with a soft exterior cover.
Jeremy thought the insurer’s decision was unfair. Jeremy said his case was a professional level bike bag used by many athletes worldwide and that very few cyclists would use a hard case. Based on the information on the website Jeremy believed he was covered as the bike was correctly packaged in a suitable protective case. Jeremy said that the endorsement requiring the bike to be transported in a hard case was fundamental to the policy and should have been drawn to his attention by the broker and insurer.
In addition Jeremy said he knew of other cyclists, using the same policy, with damaged bikes transported in similar cases where the insurer had accepted the claim.
The starting point for our analysis was the policy. The policy provided that the insurer will only provide cover if the bike is transported in a hard case. Although the case had a rigid frame and was a high quality case it could not be classified as a “hard” case. We had no option but to conclude the insurer was entitled to decline the claim.
However we asked the insurer about Jeremy’s anecdotal advice that other claims in similar circumstances had been accepted, and whether on this basis the insurer would be prepared to contribute something towards Jeremy’s loss. The insurer confirmed other similar claims had been accepted but maintained its decision to decline Jeremy’s claim.
We also considered whether the policy was fit for the purpose for which it was provided. However as the information about the policy was provided by the broker, we considered this complaint was more properly directed to the broker. The broker was also a FSCL participant, and we referred the complaint to the broker’s internal complaints process.
Although the broker did not accept he was responsible for the loss he immediately offered to fully compensate Jeremy for the damage to his bike. The broker said he would no longer use the insurance company that has declined Jeremy’s claim and he was sure there were other insurers who would provide cover for bikes packed in soft cases with metal frames. Jeremy was very happy with the outcome.