Insurance has been around for nearly 300 years, and for most of that time we have had a love–hate relationship with it.
In 1890 American satirist Ambrose Bierce defined it, in his Devil’s Dictionary, as: “Insurance – an ingenious modern game of chance in which the player is permitted to enjoy the comfortable conviction that he is beating the man who keeps the table”. Then in 1984 David Yates wrote in the Sunday Times, “an insurance policy is like old underwear. The gaps in its cover are only shown by accident”.
My interest in the topic was reignited when I received an email from Barry, telling me about his battle with Zürich over a lost luggage claim which went all the way to the Financial Ombudsman Service, where he lost.
He told me that he and his wife were travelling overseas, and left their luggage locked in their rental car in a Seville hotel car park overnight. Spain is notorious for theft, and when they went to their car next morning they found the boot had been prised open and their luggage had been stolen.
They were keen to do the right thing, so proceeded to the local police station where they reported the theft, as is required under the terms of the policy – a process that involved several hours waiting in a queue. They also rang Zurich and were advised that it would be fine if they made their claim when they returned home to Sydney.
Barry tells me that completing the claim form was very time-consuming because the insurance company wanted receipts for all the contents that had been stolen, as well as for the cases themselves. It took several days to contact various retailers to receive duplicates of the paperwork.
Finally the claim was lodged, but it was eventually refused on the grounds that the luggage had been “unattended”. Zürich referred him to the Product Disclosure Statement (PDS), which on page 47 defined “attended” as “watched by you”. As a frustrated Barry pointed out to me, this seems to mean that luggage in the hold of a bus, or held in the luggage room at a hotel, is excluded.
Barry’s story led me to do something I have never done before: I actually read the entire PDS from Worldcare Travel Insurance, which is my preferred insurer when I travel. It runs to 50 pages, but in all fairness to the insurance company I must admit that the conditions are clearly spelt out in plain English. I also noted that many of the conditions depended on the level of policy. Obviously the higher the premium, the more extensive the cover.
In the luggage section they state they will not pay the claim if it is not reported within 24 hours, nor will they pay for jewellery, mobile phones, cameras or personal computers if these are checked in with your luggage and not carried on your person. They also state that they will not pay for theft of luggage and personal effects left unattended in a motor vehicle unless they were left in a concealed storage compartment of the locked motor vehicle.
However, even if the goods are locked in a motor car in a concealed compartment they will not pay if the goods were left in the car overnight. I have only paraphrased slightly: the language is in plain English and unequivocal.
Travel insurance is a must for anybody going overseas, especially in the case of a medical emergency. But the lesson here is to take the time to read the fine print. If Barry had been clear about his policy inclusions, he might have chosen to bring the luggage up from the car that night, or at the very least saved himself a lot of time and effort preparing and disputing the claim.
- Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance | firstname.lastname@example.org