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Determination
Case number | 1036161 |
Financial firm | Lloyd's Australia Limited |
Case number: 1036161 28 May 2024
The complainant had travel insurance with the financial firm (insurer) for a trip to Europe between 3 August 2023 and 15 September 2023.
The complainant lodged a claim for luggage stolen from a shuttle bus she took from Barcelona airport on 6 August 2023.
The insurer denied the claim as it says the complainant left her luggage unattended, which is excluded from cover under the policy.
No. The insurer is not entitled to refuse the claim.
The outcome is fair because:
This determination is in favour of the complainant.
The insurer is to accept her claim and settle her for her lost luggage in accordance with the policy terms.
No. The insurer is not entitled to refuse the claim.
When making a claim, the complainant has the onus to show she suffered a loss of a type covered under the policy. The complainant must show this on the balance of probabilities (i.e. that it is more likely than not).
If a claimable loss is shown, then the onus transfers to the insurer to show, on the balance of probabilities, it is entitled to deny the claim or reduce its liability.
The full terms and conditions of cover are set out in the product disclosure statement (PDS) and certificate of insurance. Relevant terms are included in section 3.2 of this determination.
The policy provides cover for luggage and personal effects which are stolen or permanently lost on the complainant’s journey.
The complainant says her bag went missing on a bus trip from Barcelona airport to the city centre on 6 August 2023. She provided a police report dated 7 August 2023 for lost or stolen items totalling approximately 2,500 Euros and lodged her claim on that date.
The insurer has not disputed the complainant’s bag was stolen or permanently lost as claimed. Accordingly, I am satisfied the complainant has established a claim within the terms of cover, so the insurer has the onus to show why it should not cover the claim.
The policy states the insurer will not pay for loss or theft of luggage which occurred while the luggage was left unattended, which is defined to include when an item is:
The insurer relies on this exclusion to decline the complainant’s claim.
The term unattended has also been judicially considered, establishing what is known as the Starfire test. This test considers whether the insured person is:
The Starfire test does not require the item to be kept under constant observation. Rather, a capacity to keep the item under observation and a proximity such that an insured could attempt to prevent unauthorised interference is the test. I accept the policy definition of the term unattended is generally consistent with the Starfire test.
The complainant denies leaving her bag unattended as she was on the bus with the bag and did not leave it behind. The complainant says:
The insurer notes the complainant was five metres from her bag, which was not in her line of sight, and she was unable to prevent unauthorised interference with the bag. Accordingly, it says the bag was unattended under the policy terms. I agree the bag was unattended as defined by the policy and the Starfire test, as the complainant was not in a position to observe her bag or to prevent unauthorised interference with it.
The next matter for consideration is whether section 54 of the Act provides relief to the complainant.
Section 54 of the Act provides an insurer may not refuse to pay a claim by reason of an act or omission of the insured after the contract was entered into, but may reduce its liability in respect of the claim by the amount that fairly represents the extent to which its interests were prejudiced as a result of that act.
Section 54(5)(b) states an insurer may not refuse to pay a claim due to an act if it was not reasonably possible for the complainant not to do the act. The complainant has the onus to show the act was not reasonably avoidable. The relevant act in the circumstances was the complainant leaving the bag unattended in the designated luggage area of the bus.
The complainant says it was not reasonably possible for her to avoid this as she was required to leave her luggage in the designated area and was directed by the transport staff to take a seat, and was obliged to comply with both requirements under the general conditions of her ticket. She says no seat with a line of sight to her bag was available, so it was not possible for her to choose a seat from which she could observe the bag.
The complainant provided a link to the general conditions of the shuttle bus service, which she was required to accept to purchase her ticket for the service. Relevant terms are set out in part 3.3 of this determination. The conditions indicate luggage should be put in the luggage compartment, and passengers should avoid disturbing other passengers and follow instructions from staff.
The insurer says it may have been possible for the complainant to keep the bag on her lap, or to stand in a position where she could see it. The complainant disputes this and says the bag was too heavy and large to be on her lap, and notes she also had hand luggage and a passenger next to her so it would not fit. She notes the bus was full so there was no option to keep bags on seats. She says she could not stand closer to the bag as there was no standing room and she would have blocked the aisle. She also says it would not have been safe to stand holding multiple items of luggage through the bus ride, and she was following instructions as required by the general conditions.
The complainant has provided a consistent account of the loss, including acknowledging at the outset that she could not see her bag on the bus. There is no information contradicting her account. Accordingly, I accept her account of what occurred on the bus.
The complainant notes the shuttle bus service sells tickets for the bus based on the seats available and provides a designated luggage area knowing most passengers will have large bags. This is supported by the general conditions provided. The photograph provided by the complainant of the bus interior shows many rows of seats, two either side off a relatively narrow aisle, and she describes the luggage area being near the front of the bus followed by disability access seats.
Considering the layout of the bus (as explained by the complainant and shown in the photograph she provided), it appears the majority of the bus was taken up with seats. Even if it was physically possible for the complainant to remain with her bag during the journey, it does not appear it would be practical or possible for every passenger to attend to their bag in this way.
The insurer acknowledges the shuttle bus website says the bus has an area reserved for large luggage but says this was not a requirement. It has not commented on the general conditions or the requirement for the complainant to follow instructions from the transport provider. While it may be theoretically possible for the complainant to have stood with her bag contrary to the instructions she was given, I do not consider it is reasonable to expect her to disregard the conditions she accepted when she bought the ticket.
Accordingly, I accept it was not reasonably possible for the complainant to avoid leaving her bag unattended in the circumstances. As such, the insurer is not entitled to refuse the complainant’s claim and is to settle her for her lost luggage in accordance with the policy terms.
The outcome is fair because:
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.
10. Luggage & Personal Effects
Coverage under this section applies to all plans other than the Medical Only plan. In this section:
…
‘Unattended’ means but is not limited to when an item is:
We Will Pay
We will pay the repair cost or value of any Luggage & Personal Effects which are stolen or accidentally damaged or are permanently lost during Your Journey.
When calculating the amount payable We will apply depreciation due to age, wear and tear. The amount of such depreciation will be determined by Us. No depreciation will be applied to goods purchased duty free prior to Your departure or goods purchased during Your Journey.
We will not pay more than the original purchase price of any item. We may repair or replace any item with an equivalent item at Our option, instead of paying You.
…
We Will Not Pay
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c) For loss, theft of or damage to Luggage & Personal Effects which occurred:
• while they were left Unattended in any place at any time, unless secured in Your accommodation (excluding shared accommodation or room such as a hostel, Airbnb or camp grounds), a safe or secure luggage locker;
• …
• while they were left Unattended and visible in a motor vehicle unless they were left in a concealed storage compartment of a locked motor vehicle; and/or
• ...
Conditions as stated on the English translation option on the shuttle bus webpage:
General conditions of the transportation service
1. ACCEPTANCE OF THE GENERAL CONDITIONS
The transportation service agreement from […] entity through the website […] (hereinafter, the “Website”) necessarily imply your acceptance of the present general conditions. Therefore, when you mark the box enabled to this purpose and purchase the corresponding ticket accept, without any reserve, the present general conditions.
…
7. LUGGAGE
…
You have the right to carry for free hand packages, whenever they do not contain substances that could be dangerous for the vehicle or its occupants, either the size, volume, material content or smell could damage, disturb or stain the other passengers. The hand package must be of limited dimensions, it will be under your own responsibility during the hole travel, and you should put it correctly on the compartment that is prepared to that effect, taken the necessary preventive measures to avoid possible damages or disturbs to the passengers and imperfections to the vehicle, and subjected yourself in every moment to the instructions that you receive from the staff of the shipping company. The company will not answer about the damages and/or the deteriorations that the hand packages could suffer, neither in case of robbery, or loss of them.
…
12. PROHIBITIONS
...
They will not be allowed to use the service people who:
…
4. Carry objects that, due to their volume, composition or other causes / characteristics, pose danger or discomfort to other travelers or to the vehicle.
5. Alter the elementary rules of education and coexistence, or that may endanger the safety of the driver, that of the rest of the occupants of the vehicle, and that of other road users.
6. As well as those that fail to comply with the other conditions determined by the Ministry of Transport, Tourism and Communications.
Likewise, drivers will have the power to make people who access it leave the coach under any of the conditions just outlined.
