SERVICE: Contents
OUTCOME: Not upheld
Issues: Misselling/ misleading information/ misrepresentation, Scope of cover
Mr A held contents insurance with the insurer. In 2013, Mr A told the insurer he had placed some contents into storage, and the insurer provided a policy schedule saying that he had contents cover of $15,000 while in storage, for one year (the limit).
In January 2023, Mr A made a claim to the insurer of $10,206, saying that his contents in storage had been damaged by flooding. The insurer declined the claim on the basis of a policy exclusion for contents in storage.
Mr A complained, because he had told the insurer the contents were in storage in 2013 and it had not asked him whether they had been moved out of storage, or told him about the limit.
The insurer said that, if it had known the contents were permanently in storage, it would not have agreed to provide cover. As a result, it refunded Mr A the premiums paid since 2013, an amount of $6,234.
The case manager’s assessment
Mr A said that he had told the insurer the contents would be in storage until he had completed some renovations, which had not yet happened. Therefore, he believed the cover should have continued until he told the insurer otherwise. The only document available was the 2013 schedule, which set out the limit.
Generally, it is up to an insured person to read and understand the terms and conditions of the policy. If the insured is not satisfied or does not accept the terms provided, it is their right to seek insurance elsewhere.
However, the law requires onerous or unusual clauses not to be hidden within the standard terms or conditions; they must be brought fairly to the notice of the insured. If an exclusion or limitation is onerous or unusual, an insurer must ensure the clause is specifically drawn to the attention of the insured.
In this case, the case manager believed the insurer had brought the limit sufficiently to Mr A’s attention. The 2013 schedule set out the limit, showing that the storage cover was for 1 year. The schedules for the following years did not contain any storage cover.
While Mr A had dyslexia, meaning he found reading documents difficult, the case manager did not believe the insurer had to do any more, to ensure he had the cover he wanted. Rather, Mr A needed to tell the insurer that the contents were still in storage each time the policy renewed. The case manager believed the insurer’s decision to refund the premium paid was fair and reasonable in the circumstances.
Complaint No: 00230450