“Insurance policies often contain reasonable care conditions that require you to take care of your insured property,” Stevens said.
“However, you can also expect insurers to take a considered approach to each claim, reviewing the specific circumstances,” she said.
The couple, identified as Mr and Mrs Singh*, had left a small window open when they went away for a holiday.
The burglar used the window to gain access to the property and their insurer initially rejected a claim for the stolen goods because the couple had failed to securely lock the house.
During their investigation, the IFSO scheme found the Singhs’ insurer had introduced a policy in 2020 that imposed a new condition on the customer to ensure their goods were secure when unattended.
Such a policy is not common, and the IFSO Scheme said today other insurers did not have similar conditions in their own contents policies, making it an unusual requirement.
“Other insurers will also usually cover claims where a window has been unintentionally left unsecured,” Stevens said.
“If you have been reckless, grossly careless or grossly negligent with your property, an insurer may rely on your failure to meet a reasonable care condition to decline your claim, however, this was not the case with the Singhs.”
Stevens said the law stated that unusual or onerous conditions of an insurance policy should be brought to customers’ attention and there was no evidence the couple had been made aware of the change.
“While the ideal situation is where an insured has taken all steps to prevent a burglary, homeowners shouldn’t be disadvantaged by an unusual or unfamiliar condition in their policy, particularly where it is out of step with the rest of the industry,” Stevens said.
“We expect insurers to clearly communicate policy changes to their customers, so they know exactly what is expected of them, and what they have to do to ensure they will be covered under the policy,” she says.
The Ombudsman made recommendations for people this holiday season, including checking your policy and making sure your home and belongings are secured.
*Names changed by IFSO due to privacy reasons
Hazel Osborne is an Open Justice reporter for NZME and is based in Te Whanganui-a-Tara, Wellington. She joined the Open Justice team at the beginning of 2022, previously working in Whakatāne as a court and crime reporter in the Eastern Bay of Plenty.
