Make sure there is no wiggle room for insurers to avoid your claims this Christmas

What could possibly go wrong with your insurance policies at Christmas?  

Plenty, according to case studies from the Insurance and Financial Services Ombudsman.

Kiwis have encountered all sorts of festive folly and misfortune.

Twelve Robbers Robbing

Renting out your house over Christmas?  What happens when you come home and find your furniture and appliances missing?  

In one case the insurer didn't have to pay a cent.  It was clear the robbers were new flatmates renting the house over the holidays.  The owner's son met them in a nightclub.  The policy excluded theft by any person residing in the home.  

Eleven Fibs a-Fibbing

A little fib is a false statement and if it's knowingly false the whole claim can be declined.  In another case a Christmas burglary included a claim for DVDs.  Insurers check small things and some of the movies named hadn't been released in New Zealand at the time of the burglary.  Fraud is costly.

Ten Health Scares a-Holidaying

A Christmas trip to Europe was put on a credit card, activating the travel insurance feature of the card.  Due to some osteoarthritis in her hip Mum gets a steroid injection before leaving.  On Christmas Day she ends up in hospital with septic arthritis as a result of the injection and has to delay travel.  

While the septic arthritis wasn't pre-existing, it had an indirect link to her hip and the insurer didn't have to pay out.  

Nine Motorhomes Dancing

A bus is being converted to a motorhome and needs new windows.  In the Christmas backlog at the glaziers the windows are stolen.  There is no payout on the vehicle insurance.  Why?  The glass was stored separately and the policy description only included spare parts that are "in or on the vehicle".  

A claim under the storage clause of a home contents policy also failed.

Eight Fireworks a-Flaming

Fireworks landing on a roof burnt down the top storey of a house.  Repairs took longer than expected, due in part to Christmas delays.  These were not considered unreasonable and the insurer didn't have to pay out any more than the maximum six months accommodation allowance in the policy.

Seven Lives a-Lapsing 

A life policy lapsed due to overseas travel and confusion over contact details on the file.  Two days before Christmas a discussion about reinstating it took place.  As the customer need to provide health details again and was travelling, it wasn't activated.  A few months later he died and his wife tried to claim under the policy.  No payout.

Six Goosed Emails 

A car insurance policy was cancelled due to periods of non-payment.  A broker arranged "hold cover" over Christmas.  On December 27, the insurer removed this and asked for a new application and full premium payment.  

Emails were sent, but the car owner had no email access over Christmas.  Text messages reiterated it was uninsured.  She replied saying she would look at the application form in the New Year.  Her car was written off in an accident on January 3.  No payout.

Five Stolen Rings

Off on a trip to India at Christmas, a bag of gold jewellery is put in the wardrobe.  On return it's missing and after days of searching the conclusion is a friend or family member staying in the house must have taken it.  The insurer doesn't have to pay out as these people were lawfully in the house.  

Four Dodgy Datsuns

Actually it was a Mazda with a funny smell coming from the air-con.  

There was no time to fix it before Christmas and the owner believed it was okay to drive with the switch off.  On the way to Taupo it caught fire.  The insurer declined the claim as the car wasn't roadworthy and this was known.  In the end an ex-gratia payment was made.

Three Empty Houses

Leave your house unoccupied for 60 days and an insurer can turn down a claim for burglary.  In this case the homeowner said their nephew had spent a couple of nights at the property at Christmas.  The insurer went to great lengths to interview neighbours who said they didn't see anyone.  But the customer won, as the insurer couldn't prove with enough certainty the nephew hadn't been there.  

Two Unlocked Cars

Fancy a swim in the Hutt River at Christmas?  This customer took off jewellery, put it in a suitcase in the boot and locked the car.  As it was a hot day one window was left down halfway.  Whoops.  Carelessness, negligence or recklessness gets the insurer off the hook if you take a significant risk a reasonable person wouldn't take.  No payout.

…and an Ombudsman in a Contract Tree

Janine Starks is a financial commentator with expertise in banking, personal finance and funds management. Opinions in this column represent her personal views. They are general in nature and are not a recommendation, opinion or guidance to any individuals in relation to acquiring or disposing of a financial product. Readers should not rely on these opinions and should always seek specific independent financial advice appropriate to their own individual circumstances.