Travel insurance denied after bag left unsighted for 15 seconds

Leaving his bag unattended for 15 seconds cost one New Zealand traveller $13,000.

The man, who complained to the Insurance and Financial Services Ombudsman (IFSO) this year, put his bag down at a Zurich railway station while on holiday in Europe.

He walked six or seven metres to put rubbish in the bin, turned back, and the designer bag was gone. It contained items worth $13,000.

The man lodged a claim under his travel insurance policy but was declined because he had left the bag unattended in a public place.

The IFSO also turned down his complaint, saying the important aspect of the claimant’s conduct was that he had turned away from his bags and could not see them, even if it was only for a short period of time.

‘‘When he turned again to view his bags, one was gone. This indicated he was turned away from the bags for a sufficient period of time for someone to take the bag and exit from view,’’ the case manager said.

‘‘The bag was not under his control; it could be taken without his knowledge; and, as he had turned away from the bag, he was not in a position to be able to prevent it from being taken, because the bag was not within his sight.

‘‘Accordingly, the insurer was entitled to rely on the exclusion to decline the claim.’’

Ombudsman Karen Stevens said her scheme received a steady number of travel insurance complaints.

Leaving bags ‘‘unattended in a public place’’, including airports, stations, hotel foyers and beaches, was a common justification to reject a claim, she said.

Travellers were required to take ‘‘reasonable care’’, be vigilant and adhere to warnings. That can include wearing jewellery or locking it in a safe, and packing electronics and other valuables as carry-on luggage, not checked-in, on flights.

In another case her office dealt with, a woman was on holiday in the United States, trying to deliver a vacuum-packed bag of raw chilled lamb to a friend.

Bad weather meant she could not travel to her final destination but her bag still got through.

She went to a different city, where her bag was meant to be returned to her. It did not arrive.

More than a week after she got home, she was told that her bag had arrived in New Zealand and the meat was rotting.

When she picked up her bags she realised the meat had contaminated all the contents. Everything smelt of rotting meat.

She lodged an insurance claim but was declined because the damage was caused by leakage, which was excluded under the policy.

Again, the IFSO backed the insurer. It said leakage was not covered by the policy, no matter what caused it.

Stevens said it was important that people understood what they were and were not covered for.

The only way to know for sure was to read the policy documents and ask for clarification if they were not clear.

‘‘While insurance can now be purchased online, via an agent, or as a credit card perk, it’s important to get hold of the policy and check your cover and your obligations – for example, you need to take care of your belongings,’’ Stevens said.

‘‘When you apply for the insurance, you need to tell your insurer about any pre-existing health condition you know about and, if they accept it, pay an extra premium for it.’’

Consumers were also often caught out by time limits or age restrictions on credit card insurance, monetary limits for valuable items, and exclusions such as preexisting conditions.

‘‘The insurer was entitled to rely on the exclusion to decline the claim.’’ Karen Stevens, Insurance and Financial Services Ombudsman