23 December 2019
For a smooth summer holiday, the Insurance & Financial Services Ombudsman Scheme has some tips to help you avoid holiday mishaps resulting in declined insurance claims. “It’s a busy time of year but taking a few steps before you leave could make all the difference if something does go wrong,” says Insurance & Financial Services Ombudsman, Karen Stevens. As a complaints organisation, the IFSO Scheme knows things do go wrong. These tips have been developed from common complaints about declined claims.
1. Renew your insurance
Make sure you are up to date with your payments. If you haven’t paid your premiums, your policy can lapse and you won’t be covered for anything after that date.
2. Lock your house and close the windows
Double check that your house and garage are locked, most policies exclude cover for theft from unlocked premises.
3. Let neighbours know you’re going away
Taking “reasonable care” is a standard obligation on every person insured under a policy. Let your neighbours know you’re away and leave sensor lights on. Also try not to advertise you’re away, including social media and phone messages.
4. Lock your valuables away, including if people are staying in your house
Take care if you have people staying in your home while you’re away, as theft by people lawfully in the house won’t be covered. “We’ve seen cases involving open homes, trades people, and people staying in someone else’s home, where claims for theft by people lawfully at the house have been declined,” says Karen.
5. ‘Lock it or lose it’ on your road trip
24 incidents of theft from cars over one weekend in Wellington was a wake-up call for insurance customers. Leaving your car unlocked, windows down, or your belongings visible are grounds for insurers to decline a claim due to the insured failing to take reasonable care.
Prepare for road trips:
1. Check your car before you travel. Make sure your car has a warrant, and check its “road-worthiness”, including the tyres. Claims can be declined because the car is unsafe or not roadworthy – even if it had a warrant (e.g. tyres with a low tread can contribute to accidents.
2. Drive carefully. This is the most important tip for many reasons. Insurance doesn’t cover damage caused by reckless driving.
3. "Lock it or lose it". If you fail to take reasonable care by leaving your car unlocked, windows down, or your handbag or valuables visible, insurers can decline a claim.
4. Comply with your driver’s licence conditions. Driving “in breach” of your licence is grounds to decline a claim. Parents often end up paying for the damage to their own and another car, if they allow teenagers to drive outside their learner or restricted driver’s licence conditions and an accident occurs.
5. Take note of new alcohol driving limits. There are insurance, as well as legal, consequences for driving over the limit. If you’re over the limit and an accident happens, you won’t be covered.
Before you travel overseas:
1. Check your insurance policy. Travel insurance is often purchased online, through a travel agent, or comes at no cost as a credit card benefit. It is important to get a copy of your policy and read it. Limitations on credit card insurance, such as time limits and age restrictions, catch people out.
2. Tell your travel insurer about your health conditions. Tell your insurer about all health conditions and symptoms you know about. Most often, you will not be covered for any pre-existing conditions, unless the insurer has accepted them in writing and charged an extra premium. Sometimes, there will simply be no cover available.
3. Take care of your valuables and bags. Taking reasonable care is a standard insurance requirement. Most insurance policies specifically exclude cover for personal items left unattended in a public place. This can include beaches, backpacker hostels and airports.
4. Wear jewellery or keep it in a safe. Insurance policies will often have specific conditions for valuable items. Many claims have been declined because jewellery was stolen or lost when it was not “worn or carried” on the person, as required under the policy.
5. Report incidents immediately. Contact the police and your insurer as soon as you can. Travel policies will specify the required timeframe, and usually provide an emergency helpline. Often insurers will ask for copies of police reports, together with receipts, or proof of ownership of stolen items.
Merry Christmas and enjoy your break!
The IFSO Scheme is a free and independent service for complaints about insurance & financial services.