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When an instruction to your broker falls between the cracks

An instruction that falls between the cracks 

Bertie contacted her insurance broker, Jermaine, to ask about extending her insurance policy to include cover for landlord’s loss of rental.  Bertie was still living in her house at the time, but was looking to rent the house in the near future.  

After an earthquake in September 2010 Bertie moved out of her house and rented it to tenants. Bertie emailed Jermaine to include loss of rent cover on her policy. A second earthquake in February 2011 left Bertie’s house untenantable. Bertie tried to claim for her lost rental income, but was told that she did not have the appropriate cover in place. 

Bertie contacted Jermaine to ask why her policy had not been updated to include cover for lost rent.  

Jermaine said that he remembered having a general discussion about loss of rent cover before September 2010, but did not believe that he had received a specific instruction from Bertie to arrange the extension of cover.  Jermaine could not find any record of the email which Bertie sent that requested the additional cover. Bertie did not have a copy of this crucial email either: she had deleted it, having been told that the loss of rent cover “would be taken care of” at the time. 

Bertie complained to FSCL. 


FSCL’s review 

FSCL investigated and took the view, on the balance of the evidence, that Jermaine had not received Bertie’s email. Bertie could not provide evidence of the email correspondence, Jermaine had meticulous records of his  dealings with clients, and there was no evidence to suggest that any of Jermaine’s records had been lost, removed or destroyed. 

FSCL did not question Bertie’s recollection of sending the email but noted that due to the unstable nature of infrastructure in the Canterbury region immediately after the September earthquake it was not uncommon for emails to be sent but not received. 

Importantly, Bertie’s current insurance company would not have agreed to the policy change even if Jermaine had received Bertie’s instruction.  The insurance company’s regional manager and underwriter both provided evidence to FSCL confirming this.  There was also no evidence that any other insurance company would have issued a new policy to Bertie  for loss of rent. 

So, even if FSCL found that Jermaine negligently failed to carry out Bertie’s instruction, Bertie would most likely have been in the same position anyway. In other words, Jermaine would not have been the cause of Bertie’s loss.  

Bertie withdrew her complaint.  


A practice note on evidence 

FSCL must consider and weigh the evidence provided by both parties to a complaint. 

Unfortunately for Bertie, there was no evidence to support her claim because she could not find the email she thought she had sent. If Bertie could provide the email, Jermaine would have trouble proving that he had not acted negligently. Whether you are providing or receiving a financial service, it is very important to keep records of your correspondence (including email correspondence) with the other side to support your arguments should a dispute arise.