Background
Oliver is a truck driver employed by a trucking company that transports items across the North Island. In late January 2023, Oliver was scheduled to drive a 19-metre truck and trailer from Auckland to Whitianga. The state highway had been previously opened and closed throughout January due to heavy rain and other weather events. Oliver arrived to find the state highway closed. He checked his GPS (a device in his truck to help guide travel routes), which showed that the only other way to get his truck to Whitianga was to take a different road (Road A).
Oliver is an experienced truck driver, but he hadn’t driven on Road A before. He drove his truck up the paved road, which then started getting more and more narrow, and then it became gravel with sharp turns. It was nighttime, there were no streetlights, and the wind was picking up. Oliver slowed down. He came to another bend in the road, but the truck slipped and fell off the side of the road. The truck had to be recovered and fixed, and the spilled items had to be cleaned up.
The trucking company claimed against their insurance policy which covered any accidental loss or damage to their trucks, as well as cleaning costs and the cost to recover the truck. However, the insurer declined the claim saying that Oliver didn’t properly consider the risks of the new route, so he was “reckless”, which was an exclusion to cover under the policy.
The trucking company then complained to FSCL.
Dispute
The trucking company said that Oliver had a genuine accident. They said that the road was open, the GPS said this was a useable alternative route, and that there were only the usual signs, found all over the Coromandel, about winding roads. The trucking company said there was no specific warning against driving a truck on the route. The trucking company also said that Oliver did not see any risk and when he realised the road was narrowing, he slowed down and took the expected precautions. The trucking company said that Oliver had not been reckless.
The insurer said that there were warning signs at the start of Road A saying that the road was narrow, steep, winding and unsealed, and that this would have told Oliver that the road was not suitable for him to drive. They also said that the change in the road from paved two-way to single-way gravel would have made this obvious.
The insurer said that Oliver was reckless when he continued on the road. They said he had never driven the road before and that he knew it was dark, winding, and that there had been changes in the road. They said that Oliver had opportunities to turn around but chose not to, making him reckless.
Review
We explained that for the insurer to be able to decline the trucking company’s claim, they would need to show that:
- Oliver took a risk that an ordinary person wouldn’t have, or
- that Oliver knew that there was a risk, but chose to ignore it.
In other words, the insurer needed to show more than mere carelessness in the form of gross recklessness.
We said that Oliver did what most other people would have done when finding out the state highway was closed; he put his destination into the GPS to find a different route that was open and then followed that route. While there were road signs about the gravel and steep, and winding roads, there were no road signs saying that it was unsuitable for a truck. Once Oliver realised there was a risk, it was too late to turn back and he instead drove slowly and carefully. We said that an ordinary person would have done what Oliver did in these circumstances.
We found that the reckless behaviour exception to the policy did not apply, and that the insurer should have accepted the trucking company’s claim for getting the truck recovered and fixed, and the area cleaned up.
Resolution
The trucking company accepted our Ombudsman’s final decision, so we closed our file.
Insights for participants
This was a good case on interpreting a ‘recklessness’ policy exclusion, which can be quite a detailed analysis and involves considering relevant case law.
