The insurer declined the claim on the basis of policy exclusions, saying that the loss had been caused by, or had arisen from, a travel warning in place for Pakistan at safetravel.govt.nz, and Peter leaving his bags “unattended in a public place”.
Peter* took out travel insurance prior to a trip to Pakistan.
During his trip, he took a taxi between Peshawar and Parachinar. Peter left his bags in the taxi while it was stopped at a rest-stop bathroom. When he returned, the taxi was gone, together with his bags. Peter then made an insurance claim for the items.
The insurer declined the claim on the basis of policy exclusions, saying that the loss had been caused by, or had arisen from, a travel warning in place for Pakistan at safetravel.govt.nz, and Peter leaving his bags “unattended in a public place”.
Peter complained to the IFSO Scheme. The IFSO Scheme looked at Peter’s policy and the exclusions that had been used to decline his claim.
In order for the insurer to rely on the exclusions to decline the claim, they had to prove that the loss of Peter’s bags was directly or indirectly caused by, or had arisen from:
and/ or
The IFSO Scheme considered that there was no causal connection between the travel warning and the loss of Peter’s bags. More specifically, the loss could not be attributed to “kidnapping”, “terrorism”, or “the unpredictable security situation” as stated in the warning.
A search of the Safe Travel website showed that several warnings for other countries listed “crime” as part of the warning, while the warning for Pakistan did not.
The insurer had not established that the loss, which was an opportunistic theft by the taxi driver from the taxi, had been directly or indirectly caused by, or had arisen from, the travel warning.
For this reason, the insurer could not apply the travel warning exclusion to the claim.
Regarding the bags being left unattended in a public place, the IFSO Scheme considered that the inside of a taxi didn’t fall under the policy definition of “Public Place”, which was:
“Any area to which the public has access (whether authorised or not) including but not limited to hotel foyers and grounds, restaurants, public toilets, beaches, airports, railway stations, bus terminals, taxi stands and wharves.”
The insurer agreed that a taxi was not a public place, however, it said the exclusion still applied as the items were left unattended.
However, the exclusion had two parts to it: it plainly and unambiguously read that the items must be “left Unattended by You … in a Public Place”.
This could not be read as a choice between two options, because it was not worded in that way and, therefore, the insurer had to also consider whether the items were left in a “Public Place”.
The insurer had not proven that the loss of Peter’s bags had been caused by, or had arisen from them being left unattended in a public place.
The IFSO Scheme found that the insurer could not rely on either of the policy exclusions to decline the claim, and so upheld the complaint. The insurer was required to pay Peter’s claim.
Complaint upheld
When an insurer decides to decline a claim using an exclusion, they must prove that all parts of that exclusion apply.
* Name has been changed