The Insurance & Financial Services Ombudsman Scheme (IFSO Scheme) has stressed the importance of homeowners taking the necessary precautions to secure their properties over the Christmas period.
IFSO’s Karen Stevens stressed the importance of complying with policy terms and conditions regarding the security of insured properties.
“Always take care to protect your contents by locking your house and closing windows when you go on holiday. Insurance policies often contain reasonable care conditions that require you to look after your insured property. However, you can also expect insurers to take a considered approach to each claim, looking at the specific circumstances,” said Stevens.
As an example of the importance of this advice, Stevens cited a particular couple who suffered a burglary after leaving a window open while on holiday. Their initial claim was rejected by the insurer on the grounds that they had not complied with a policy condition introduced in 2020, which requires the house to be securely locked when unattended. This condition, which is not commonly found in other insurers’ contents policies, was scrutinised by the IFSO scheme.
“While it’s common for travel insurance policies to have an exclusion for claims where items have been left unattended in a public place, it’s unusual for a contents policy to have such a condition or exclusion. Other insurers will also usually cover claims where a window has been left unintentionally unsecured. If you have been reckless, grossly careless or negligent with your property, an insurer may rely on your failure to take reasonable care to reject your claim, but this was not the case with the Singhs,” she said.
The IFSO scheme’s investigation found that the insurer did not adequately inform the couple of this particular condition, which was considered “onerous or unusual”. According to Stevens, insurers have a duty to disclose such conditions to their customers. The complaint was resolved in the couple’s favour, with the IFSO Scheme ruling that the insurer could not rely on the condition to reject the claim.
Stevens emphasised the need for insurers to communicate policy changes clearly and to ensure that customers are aware of their responsibilities under the policy. She also provided tips for homeowners planning holiday trips, stressing the importance of checking policy limits, securing properties, informing insurers of extended absences and ensuring ongoing cover.
“We provide a free, fair and independent service to investigate consumer complaints about insurance and financial services,” she said.
In other recent developments, recent data from Kiwi general insurer State shows that over 30% of content claims on Christmas Day are attributed to incidents that occur during meal preparation.
