The story
After living in New Zealand for five years Shamin went back to Bangladesh for the first time. Shamin wanted to present a good image, so was carrying with him new clothes, gifts, cash, jewellery, a camera and mobile phone in total worth NZD10,000.
Shamin caught a bus and then a public rickshaw to travel from Dhaka to his home village. When Shamin got on the rickshaw he placed his bag in the baggage storage area, about 2.5 metres from where he was sitting. It was hot, approximately 10.30 at night and Shamin fell asleep. While Shamin was sleeping his bag was stolen. Shamin reported the theft to the police the next day, but the police were unable to help.
Dispute
After returning to New Zealand Shamin made an insurance claim. Shamin’s insurer declined the claim because it considered he had failed to take reasonable precautions to prevent the theft of his bag.
Shamin did not accept his insurer’s decision saying in the circumstances in which he found himself he made the best decisions he could for his personal safety and the safety of his belongings. Shamin explained that the political climate in Bangladesh was unstable, and he considered the safest time to travel was at night. Shamin said that he did not want to draw attention to himself as a tourist, so chose to dress and travel as the locals do. Shamin placed his bag in the baggage storage area because this is what local Bangladeshis do. If he had held on to his bag it would have been obvious he was from abroad, increasing the risk of kidnapping.
FSCL’s review
Shamin’s travel insurer had agreed to compensate Shamin if he lost his baggage. However the policy also required Shamin to take reasonable precautions to protect his property from loss. The obligation to take reasonable care is a standard insurance provision. Shamin did not need to avoid every conceivable risk, but he did need to act as the reasonable person when assessing and exposing himself to risk.
Shamin had identified his travel as risky. However, in our view, Shamin had failed to take reasonable care. We considered it was not reasonable for Shamin to place a bag containing goods worth NZD10,000:
- 2.5 metres away from where he was sitting
- on a public rickshaw
- with passengers getting on and off
- then fall asleep.
We observed there were things Shamin could have done to minimise the risk. He could have:
- placed the money, jewellery and mobile phone in a money belt underneath his clothes
- sat closer to the baggage storage area
- made more of an effort to stay awake
- watched the people getting off the riskshaw.
If the political situation was so unstable as to pose a real risk to Shamin’s personal safety, we questioned the wisdom of travelling by public rickshaw at all. We also wondered whether placing his bag in the baggage area would be enough to indicate that Shamin was a local.
Outcome
We found the insurer was entitled to decline Shamin’s claim on the grounds that he had failed to take reasonable care of his property. We recommended that Shamin’s complaint not be upheld and should be discontinued.
Lesson
Travel insurance does not absolve the insured from acting reasonably to prevent loss. Overseas travel can be risky. The insured person is obliged to assess and take reasonable steps to minimise or avoid risk. Provided the insured person takes reasonable care to prevent loss the insurer will be obliged to accept the claim, in accordance with the policy.
