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Determination
Case number | 1041173 |
Financial firm | NIB Travel Services (Australia) Pty Ltd |
Case number: 1041173 13 June 2024
The complainant held a comprehensive travel insurance policy with the financial firm (insurer).
On 30 October 2023, the complainant lodged a claim for the theft of a backpack and its contents from a beach.
The insurer declined the claim on the basis that the items were left unattended as defined by the policy and excluded from cover.
Yes. The insurer has established that it is entitled to rely on the policy exclusion for luggage or personal effects left unattended.
The insurer’s obligations are limited by the terms of the policy. In this instance, it would not be fair to require the insurer to cover the claimed loss. This is because it falls outside the scope of cover.
This determination is in favour of the insurer.
The insurer is entitled to decline the claim and is not required to take any further action.
Yes. The insurer has established that it is entitled to rely on the policy exclusion for luggage or personal effects left unattended.
It is accepted insurance law that the complainant carries the initial onus to establish, on the balance of probabilities (that is, more likely than not), a loss which is covered by the terms and conditions of the policy.
Only if the complainant can do this, will the onus shift to the insurer to show, on balance, it is entitled to decline cover in line with the policy wording or otherwise.
The complainant had an overseas trip scheduled between the period of 22 August 2023 to 12 October 2023.
On 30 October 2023, the complainant lodged a claim for the theft of a backpack and its contents from a beach. The description on the claim form states:
arrived at the beach approx 2 pm on the 3rd September. I was on a beach chair with and umbrella that i had rented for the remainder of the day. I recall placing my backpack between the umbrella and my chair as i usually did everyday. By approx 430pm i recall falling asleep for approx half an hour. upon awakening i went to my backpack to grab my mobile phone and discovered my backpack was missing. i started panicking and started to ask people around me if they had seen anyone take my bag. the beach was packed full of people as it normally was, nobody noticed anything. i then started walking up and down the beach looking for my bag or to see if anyone had it. i started looking for a police station and started asking people for directions, but i felt so stressed, lost and confused i walked around the streets on my own for two hours an d by that time it was getting dark. I returned eventually back to the hotel room which was back near the beach. the next morning i rang for a taxi to take me directly to the police station in [L], where i reported my stolen backpack. this impacted me greatly as it left me scared to be alone and i could not enjoy my remaining time in [L]. as these were my personal treasured items. i thought it was safer to have them with me at all times than to leave them in the hotel room. (sic)
The complainant reported the incident to the local police and provided a report which describes the items that were stolen. The complainant’s claim is estimated at $12,202.65.
Policy excludes cover for items left unattended
The policy provides cover for the accidental loss, theft of, or damage to, luggage or personal effects while they are accompanying the insured during a trip, subject to the terms and conditions of the policy.
However, there is an exclusion under this section for luggage or personal effects left unattended:
Luggage and personal effects
…
What is not covered?
There is no cover under this section for any of the following:
...
f. luggage or personal effects that you leave unattended or that occurs because you do not take reasonable care to protect it;
The policy defines ‘unattended’ as:
Unattended
leaving your luggage or personal effects:
The insurer says that because the complainant was asleep on the beach, she was unable to prevent her backpack from being taken. The insurer has declined cover on the basis that the items were left unattended.
The complainant disputes that she left the backpack containing her personal belongings unattended. The complainant says she could see and touch her belongings as they were right next to her and her hand was resting on the bag.
She also disputes that she was asleep at the time of the loss; rather she says she was only resting her eyes in the beach chair. In an email to the insurer dated 20 November 2023, she stated, in part:
This letter is to provide added information that l was not NEGLIGENT
nor did l leave my backpack with my personal belongings UNATTENDED.
I was a victim of crime & l feel very discriminated for resting in my armchair.
I did not fall asleep I was merely resting my eyes from the heat & glare of the sun.
I could hear all the sounds around me it was a very hot day 35' the beach & sand area was packed with people & children running up & down the sand area.
It was very noisy with people everywhere playing games talking yelling laughing & having fun.
…
The backpack was wedged between my armchair & umbrella. I took every precaution to secure my bag right next to me
…
I could touch my bag it was that close to me.
I have carefully considered the information provided by the parties, together with the policy wording. I accept the theft occurred in a public place since it was accessible by the public.
I emphasise with the complainant’s circumstances and the unfortunate events that occurred. However, after carefully reviewing the available information, and the complainant’s descriptions of the surrounding circumstances, I am satisfied the backpack was ‘unattended’ as defined by the policy.
Firstly, the complainant has given conflicting information as to whether she was asleep or resting at the time of the loss. I accept this inconsistency was unintentional however, I consider the complainant’s initial version of being asleep in the beach chair carries more weight as it was made most contemporaneously to the event. Further, the second version of events was provided after the complainant was made aware of the policy response to the claim.
In any event, whether the complainant was asleep or resting her eyes, the facts indicate that the complainant’s eyes were closed for approximately half an hour at the time of the theft. Whilst the complainant may have been within arm’s reach of her belongings, I accept, on balance, the items were left in a position where they could be taken without her knowledge after she closed her eyes. Further, I am not satisfied that the complainant had a reasonable prospect of preventing the items being taken given the duration of time in which her eyes were closed.
In the circumstances, the insurer is entitled to rely on the policy exclusion for luggage or personal effects left unattended.
The insurer has established, on balance, the loss claimed is excluded from cover under the policy and it is entitled to decline the claim.
Broadly speaking, section 54 of the Insurance Contracts Act 1984 (Cth) (the Act) says an insurer cannot refuse a claim in whole or in part by reason of some “act” (which includes an omission) that occurs after the contract of insurance was entered into unless it can show:
In considering the application of section 54 to this claim, I am satisfied that section 54(2) applies so that the insurer may refuse to pay the claim in full. On balance, there is a clear causal link between the act of the complainant closing her eyes and the theft of the backpack.
Section 54 of the Act therefore does not assist the complainant.
The insurer’s obligations are limited by the terms of the policy. In this instance, it would not be fair to require the insurer to cover the claimed loss. This is because it falls outside the scope of cover.
AFCA has determined this complaint based on what is fair in all the circumstances, having regard to:
The respective parties have completed a full exchange of the relevant information, and each party has had the opportunity to address any issues raised. We have reviewed and considered all the information the parties have provided.
While the parties have raised several issues in their submissions, we have restricted this determination to the issues that are relevant to the outcome.
AFCA is not a court of law. We do not have the power to take or test evidence on oath, or to require third parties to give evidence.
When we assess complaints, we consider:
We give more weight to documents created at the time the events occurred. If there are no relevant documents, we will decide what most likely occurred based on the available information.
If there are conflicting recollections and these are evenly weighted, we may find that a claim cannot be established.
Definitions (pages 22 to 26 of PDS)
Unattended
leaving your luggage or personal effects:
Luggage and personal effects (page 44 of PDS)
You are covered for this benefit under the Comprehensive, Essentials and Annual Multi Trip Plans.
What is covered?
We will cover you for each of the following:
...
What is not covered?
There is no cover under this section for any of the following:
...
f. luggage or personal effects that you leave unattended or that occurs because you do not take reasonable care to protect it;
