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Policy fit for purpose if policy purposefully excludes claim?

Laura goes to Canada

In September 2014 Laura travelled to Canada for her nephew’s wedding. On the night of 19 September, Laura stayed at a bed and breakfast in Vancouver. Laura left a suitcase in her rental car overnight. The rental car was parked in the bed and breakfast’s carpark. Overnight the suitcase was stolen from the rental car. Inside Laura’s suitcase was a large amount of clothing, jewellery (including her Grandmother’s engagement ring), gifts, electronic equipment and Laura’s passport.

Laura received complimentary travel insurance with Maple Insurance (“Maple”) when she booked overseas travel using her bank’s ‘Ultimate Credit Card’. She made an insurance claim to Maple for her lost property. Maple declined Laura’s claim.


Maple’s position

Maple relied on an exclusion clause in the policy to decline Laura’s claim. Maple said that Laura’s policy included a clause that explicitly excluded cover for items stolen from a car left unattended overnight.


Laura’s position

Laura complained that the insurance policy was not fit for purpose. Laura argued that there would be very few circumstances where the policy would provide cover for items stolen from a car.

Laura said that she deliberately bought her bank’s “Ultimate Credit Card” to receive the complimentary travel insurance for her trip to Canada. Laura said that she believed she had robust cover for her trip to Canada. However, Laura added that she had not read the entire policy, and if she had, she would not have purchased the credit card to receive the complimentary travel insurance.


FSCL’s position

We found that Maple’s policy was fit for purpose as there were a number of circumstances where there would be cover for items stolen from a car.

It was unfortunate that Laura had not read the policy and thought that the policy would cover her for most situations of theft from a car. However, insurers are entitled to exclude cover in its policy as they see fit. If a customer does not accept the cover offered, the customer can choose not to take out the policy, or accept the level of cover provided, or find a policy which may better suit their needs.

Laura agreed to withdraw her complaint.