Insights for consumers
It is important to read your insurance policy, especially if something has happened that you know will lead to an insurance claim. Insurance policies have terms and conditions that you must follow. If you do not follow the terms and conditions, the insurer can decline your claim, even if you have a genuine claim.
What happened?
In March 2024, Ari was on a holiday in Bali with her friends. On their last day, they checked out of their hotel and left their suitcases there while they went out. Ari packed all her valuable clothing and accessories in her backpack, which she took with her to keep safe.
Later that day, Ari was waiting for a taxi to take her back to her hotel, and then to the airport. While she was waiting, a motorcyclist drove past her and stole her backpack. Ari tried chasing after them, but they were too quick. Ari said she tried asking the people around her for help, but they did not understand her because they did not speak English.
Ari got a taxi back to her hotel, and her taxi driver told her to report the theft to the airport police. Ari then went to the airport to catch her flight back to New Zealand, but she did not speak to the airport police. When Ari got home, she contacted her insurer to let them know what had happened. The insurer told her to report the theft to the local police and make an insurance claim.
A few months later, in July 2024, Ari submitted an insurance claim. She said it took her a lot of time to find the receipts for the items she was claiming for, which she needed in order to show proof of ownership. Ari said she had jewellery, designer clothing, and other valuable items in the backpack, worth over $17,000.
The insurer declined the claim because Ari did not report the theft to local police within forty-eight hours. The insurer explained that this was one of the terms and conditions of the policy.
Ari did not accept the insurer’s decision and complained to FSCL.
What were the parties’ views?
Ari explained that she was unable to report the theft within forty-eight hours because it happened only four hours before her flight back to New Zealand. This meant that she did not have time to go to a local police station. Ari said she was also unable to call the police to report the theft, because she did not have a local sim card. Ari said that when she got back to New Zealand, she tried calling and emailing several police stations in Bali, but they did not respond.
The insurer said Ari had not followed the terms and conditions of the policy, so cover was not available. The insurer said it was a standard expectation that thefts of high-value items are promptly reported to the local police. The insurer also said that because Ari had submitted the claim several months after the theft, they were unable to properly investigate the claim, because CCTV footage was no longer available.
What was FSCL’s view?
We agreed that the insurer was entitled to decline Ari’s claim. The policy wording was clear that any thefts must be reported to the local police or other authority within forty-eight hours of the incident occurring. We told Ari that the general obligation was on her, as the policy holder, to ensure that she had read and understood the policy, including the terms and conditions of each section.
We acknowledged Ari’s view that she did not have time to stop at a police station. However, we noted that Ari could have reported the theft to the police at the airport, as her taxi driver had suggested.
We also told Ari we had reviewed other insurers’ travel insurance policies and found that all of them had a similar requirement. This supported that it was a common and reasonable requirement to include.
What was the outcome of FSCL’s investigation
We suggested that Ari discontinue her complaint. Ari did not respond, so we closed our investigation.
