Insights for participants and consumers
A travel insurance policy will not define every term or word that is used in that policy. If the assessment of a claim requires looking at a word that is not specifically defined in the policy, it is reasonable and fair for the travel insurer to consider the ordinary, dictionary definition of that undefined word.
In Mabel’s circumstances, the words ‘valuables’ and ‘personal baggage’ were defined in the policy. The valuables definition referred to including ‘jewellery’ and the personal baggage definition referred to including ‘ornamental’ items. The policy did not define what could be considered jewellery and what could be considered an ornament. We decided that it was fair and reasonable to look at the ordinary, dictionary definition of the undefined words to decide whether Mabel’s engagement ring had been correctly categorised as jewellery by the travel insurer.
What happened?
In late September 2024, Mabel claimed under a travel insurance policy, that was complimentary under her credit card, for her engagement ring that she had lost while she was travelling overseas. Mabel’s ring was valued at approximately $20,000.
In October 2024, the travel insurer accepted Mabel’s claim and offered to pay her $2,000, the maximum amount payable for ‘valuables’ under the policy.
Mabel did not agree with the travel insurer’s categorisation of her ring as a ‘valuable’, explaining that she thought her ring was more appropriately categorised as ‘personal baggage’. Mabel explained that the ring was a personal effect that she wore constantly, and that a jeweller had confirmed that the ring “can [be] and is classified as an ornamental item”. If the ring had been correctly categorised as ‘personal baggage’, the maximum amount payable under the policy would increase to $20,000.
Mabel complained to FSCL about the travel insurer’s decision to pay her only $2,000.
What did the travel insurance policy say?
The travel insurance policy defined personal baggage as:
‘items of necessity, ornament or personal convenience for your individual use during the trip, including closing and personal effects worn or carried by you’.
And valuables as:
‘jewellery, furs, articles containing previous metals or precious stones, watches….’
What was FSCL’s view?
As neither ‘ornamental’ or ’jewellery’ were defined in the policy, we decided that it would be fair and reasonable to consider the dictionary definition and ordinary meaning of each word.
The Oxford Dictionary defines jewellery as ‘objects such as rings and necklaces that people wear as decoration’ and ornament as ‘an object that is used as decoration in a room, garden, etc. rather than for a particular purpose’.
Our view was that Mabel’s engagement ring fell clearly and explicitly within the ordinary definition of jewellery. This meant that the travel insurer had been right in categorising her ring as a valuable, and the $2,000 maximum claim amount was correct.
What was the outcome of FSCL’s investigation?
We did not hear back from Mabel after we explained our views. We discontinued our investigation and closed our file.
