Auckland, October 30, 2023
People should understand the terms and conditions of their insurance policies and be sure that they are adequately and appropriately insured to avoid disputes and disappointments when their claims are processed, the Insurance & Financial Services Ombudsman has said.
A press note released today by the Ombudsman’s office cited the case of a customer, who had reported that jewellery worth $50,000 was stolen from his house.
“Sanje (not his real name) complained that his insurer had offered only $16,000. The Insurance & Financial Services Ombudsman (IFSO) Scheme found that the insurer had correctly applied the terms and conditions of his policy, which had a $15,000 limit for jewellery and watches, a $1000 limit for gemstones, and no individual jewellery items specified,” the office said.
Indian Newslink has heard of similar cases in the past and found that in many such cases, either the insurer or (more often) the insurance broker had not explained the items that are covered under an insurance policy, the limitations that can fall upon the insured in the event of claims and the admissibility of some claims.
The IFSO cited another case involving Craig (again, not the real name), who lost a pouch of jewellery while travelling.
“He was disappointed to find that the valuables limit of $750 in his travel insurance policy was the total amount for all jewellery, not for each item,” the press note said.
Insurance & Financial Services Ombudsman Karen Stevens said that the IFSO Scheme was unable to uphold the above-mentioned complaints, as the insurer had correctly applied the policy limits in both cases.
“People should take time to read and understand their policy and check what it says they are insured for, as each policy is different. The obligation rests with the insured to check the limits of their cover and that it is suitable for their needs,” she said.
The case of missing diamond earrings
Mr and Mrs Sullivan (not real names) held contents insurance and had jewellery specified on their Policy at a total value of $105,000. The Policy contained a warranty which stipulated that if the specified jewellery was not in a locked safe, it had to be worn by, or in the presence of, Mr or Mrs Sullivan.
While renovating their house, Mr and Mrs Sullivan removed the safe from their house. Prior to this, Mrs Sullivan had moved a pair of diamond earrings from the safe to store them in a concealed box in the bedroom. When the earrings went missing, the insurer declined their claim, relying on a breach of the warranty conditions. The IFSO Scheme was unable to uphold their complaint.
According to IFSO, proving the ownership and value of lost or stolen jewellery is also a common challenge that people face while filing a claim.
Vera (not real name) only had photos of herself wearing pieces of jewellery as proof of ownership.
After her jewellery was stolen, she engaged a local jeweller to give her an estimate based on her description of the items, which was $56,887.
A common approach would be for an insurer to decline to pay for the jewellery if no proof of ownership is provided. When someone has photographic evidence, an insurer might choose to settle the claim, but at a significantly reduced amount, due to the difficulty of accurately valuing an item of jewellery from a photograph.
The insurer offered Vera $27,846, based on its own valuation.
“This was fair and reasonable, because of the lack of evidence. A recent valuation would have helped her claim significantly,” Ms Stevens said.
She urged people to ask themselves some key questions relating to their jewellery insurance: (a) Do you have enough cover under your insurance policy to replace your jewellery if it is lost or stolen? (b) Do you have a recent valuation? (c) Do you have receipts or some way of proving you own the jewellery? (d) Does your insurance policy require you to keep jewellery in a safe when you are not wearing it? (e) Has your jewellery been checked by a jeweller recently to make sure gemstones are not loose? (f) Have you specified valuable items of jewellery on your policy? In some cases, insurers require a recent valuation before an item can be specified on the policy schedule (g) Have you had a New Zealand valuation for any items gifted to you or purchased overseas?
There are circumstances which are not covered, for example, if your jewellery is stolen by someone while you hold an open home, or when you have tradesmen in the house. What can you do to safeguard your jewellery in those circumstances?
“Knowing what your policy covers can greatly reduce disappointment and issues down the track. You can take preventative measures, ensure you have enough evidence if things do go wrong, and think about increasing your limits if needed,” Ms Stevens said.
The IFSO Scheme resolves complaints about insurance and financial services, and its service is independent, fair and free for consumers.
Please call 0800-888202 or visit www.ifso.nz
The above article was sent to Indian Newslink by Dr Pushpa Wood, a Commissioner for the Insurance & Financial Services Ombudsman based in Wellington.