Account of the case
The Insured A was travelling on a train on 24 November 2023 and lost the luggage in the train in Helsinki. A had tried to look for and locate the luggage using several different channels but the luggage remained lost and was assumed to be stolen. A filed a Police report on 3 December 2023 but the report did not lead to any measures. On 9 January 2024, A filed a claim for damages for the lost luggage, based on the travel insurance included in their credit card.
The Insurance Company gave a decision on the claim, referring to Clause 3 of the applicable Terms and Conditions, according to which the Policy will not compensate for lost luggage if the Police report on the loss is not filed within 24 hours from the items being lost. Since in the case at hand, A filed the report on the assumed theft only about 10 days after the loss of the items, no compensation can be paid on the basis of the Travel Insurance.
A made a request of reconsideration of the case based on the fact that, for the first, A did not want to file any Police report before it was clear that the luggage could not be found and it was thus clear that it was stolen. The lost luggage office at the railway station were also of the opinion that it might take a few days until the luggage was found. Secondly A suggests that it is unreasonable that such a pertinent point in the Terms and Conditions is hidden on page 20 of the respective booklet and that it is, overall, very difficult to find, especially in the English language. For this reason, A asks how they are supposed to know how to act correctly if they are not able obtain information on the contents of the Terms and Conditions. Be it how it may, hiding the Terms and Conditions in this manner is unfair from the customers’ point of view. A emphasises that had they known that the Terms and Conditions required a Police report within a 24-hour timeframe, they would naturally have acted accordingly.
The Insurance Company issued a new Insurer’s decision on the claim, informing that there was no reason to amend the issued decision on the basis of A’s request for a new handling.
Customer’s complaint
A was dissatisfied with the decision of the Insurer and requested that the Insurance Complaints Board issue a recommended solution in his case.
In their complaint, A repeats the facts of the event and the iter of the handing of the case by the Insurer. A notes that once they noted the luggage was lost, they checked the Terms and Conditions of the insurance under the credit card, going to the site of the Bank that had granted the credit card. The site did not mention any Terms to suggest that the Police should be reported any loss of luggage/goods within 24 hours from the loss being noted. Therefore, the customer cannot be expected to be aware of such requirement. A also notes that the Bank marketing this card also provides misleading advertisement saying that the card is intended for “uncomplicated life”. For A, uncomplicated life would mean that when a rational person acts appropriately by all standards, the compensation for lost luggage is also paid. A situation of losing one’s luggage/goods is hard for anyone. The lost luggage also contained A’s laptop which also made it more difficult to file the Police report since – for example – all the receipts and information on the lost items were stored in the computer. In any case, A immediately called the Police lost luggage service but did not understand that filing a Police report should also be done since there was not yet any certainty of a theft having been committed.
Based on the above, A repeats the claim for compensation of the lost luggage based on the travel insurance.
In the additional writ after receiving the reply by the Insurance Company, A points out that it must be deemed a proper thing to do by the Insurance company which, after receiving the remark from A, moved the English-language Terms and Conditions to a more accessible place. However, that has no impact on the evaluation of A’s case at the time of the event. A also denies having told the Insurance Company’s customer service clerk that they would have found the Finnish-language Terms and Conditions at the Bank’s site and understood them. A has not looked for the Terms and Conditions, and neither has said anything of the kind to the customer service person. A notes that with A’s language skills, they would not even have been able to understand the Terms and Conditions in Finnish. One more time, A points out that at the time of the loss, the English version of the Terms and Conditions could not be found and for that reason, it is unfair to deny compensation based on the mentioned grounds.
In the further additional writ after the Insurance Company’s additional reply, A reiterates the disapproval for the fact that the applicable Terms and Conditions were virtually impossible to find on the Bank’s web page, and this was misleading from the standpoint of the Customer.
Reply by the Insurance Company
In its reply, the Insurance Company repeats the history of the case at hand referring to the Policy Terms and Conditions applicable to the case.
The Company repeats that under the Terms and Conditions, the insurance does not cover the events of loss or theft of luggage or valuables which have not been reported to the local Police within 24 hours of notices of such events, nor if any written clarification has been obtained. The Insurance Company further specifies that since there was no intention to blame the Customer for the loss of the luggage and the Police report was not filed within the time specified in the Terms and Conditions, the recorded reason for rejection was failure to file the Police report.
In their reply, the Insurance Company further presents the link to access the full Terms and Conditions both in Finnish and in English. A had told they had found a summarising document on the Policy contents, and under the title “What is insured” there is ”Restrictions defined in the terms and conditions,” in other words more detailed restrictions in the insurance cover.
The Insurance Company points out that in situations of loss, it is pertinent to the handling of the case to get proof of the loss taking place during the travel in which case the insurance cover is in force. For this reason, the Terms and Conditions require that the Police report be filed within the period of 24 hours. The Company also points out that even though the English Terms and Conditions are separate from the Finnish version, the Customer had told they had found the Finnish version and understood them. Moreover, the Police report can also be filed without the receipts for the items thought to be stolen, and it can also be made simply by phone. Therefore, the laptop has not been indispensable for filling the report.
Further according to the Company, they cannot take a direct stand as to the Bank’s way of marketing the card with the associated Insurance Policy.
In their additional response to A’s additional writ, the Insurance Company points out that they have been doing the claims handling of the travel insurance including in this credit card since the year 2019, and the Terms and Conditions have been available at the Bank’s web page ever since. The Company also regrets the misunderstanding in so far as it has been suggested that A would have sought, found and understood the Terms and Conditions in Finnish. The Company also notes that the Customer is claiming compensation for a situation in which they have themselves left their luggage in the train. For a reason like this, the lost luggage would not be compensated even if the Customer had made the Police report for the loss within 24 hours of the event. The Customer had claimed compensation for theft in which case it would be a compensable loss, had the report been made.
Interim Measure
While the case was dealt with by the meeting of the Insurance Complaints Board, the Board decided to ask the Insurance Company for an additional stand as to whether the Insurance Company has, in the case at hand, met its information obligation under Section 76 of the Insurance Contracts Act.
In its reply to the Board’s request for supplementary information, the Insurance Company continued to refer to the fact, already mentioned in its reply, of the Terms and Conditions being found at the Bank’s web page. The Company stated that due to human error, the English-language Terms and Conditions were in a slightly different place, compared to those in Finnish and Swedish. Later, the Bank has posted the Terms and Conditions in a more easily accessible place.
Moreover, the Company states that the Customer gets information on the card Terms and associated benefits when applying for the card, and the Terms are available at the Bank’s web page. In addition, the customer service will assist and respond to questions related to the insurance cover, both by phone and by email.
To conclude, the Company repeats that a situation where the luggage is left out of sight (in a train left by the traveller at the end of line) is not covered by the insurance.
The Insured did not have anything to add after the supplementary reply given by the Insurance Company.
Recommended solution
Formulation of question
In the case at hand, the dispute is about the question whether the luggage lost by A should be compensated on the basis of the travel insurance.
The applicable norms of law and policy terms
Under Section 76 of the Insurance Contracts Act, if the terms and conditions of a group insurance contract include a provision to the effect that the insurer keeps a list of persons who are covered by the insurance, the insurer shall, as soon as the contract takes effect and at reasonable intervals thereafter, dispatch to the persons insured details of the scope of cover, major exclusions, obligations of the insured under the contract and how the validity of cover is dependent on the fact that the insured is a member of the group mentioned in the contract. If no list of insured persons is kept, the above mentioned information shall be given to the insured in a manner deemed fit in the circumstances.
If the insurer or its representative has failed to give the insured the necessary information on the insurance or has given incorrect or misleading information, the insurance contract is considered to be in effect for the benefit of the insured to the effect understood by the insured on the basis of the information received. This does not, however, apply to information given by the insurer or its representative on compensation or benefits payable after the occurrence of an insured event.
Chapter 4 Section 1 of the Consumer Protection Act reads as follows: If a term in a contract referred to in the Act is unreasonable from the point of view of the consumer or if an unreasonable result would ensue from its application, the term may be adjusted Section 2 otherwise prescribes or it may be disregarded. Also, a commitment as to consideration shall be deemed a contract term. In the assessment of unreasonableness, due note shall be taken of the contract as a whole, of the positions of the parties, of the circumstances under which the contract was concluded and, of the changes in circumstances unless otherwise resulting from Section 2, as well as of other relevant points.
If a contract term referred to in paragraph (1) is of such nature that it cannot reasonably be required that the rest of the contract remain in force unaltered after the adjustment of the term, the contract may, unless otherwise provided in section 2, be adjusted also in other respects or be ordered to lapse.
Under Chapter 4 Section of the Consumer Protection Act, if a term in a contract referred to in this Act has been drafted in advance without the consumer having been able to influence its contents and if uncertainty arises as to the significance of the term, the term shall be interpreted in favour of the consumer.
The Policy Terms in English, applicable to the case contain the following:
What is not covered:
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3. Incidents of loss or theft of baggage or valuables which are not reported to the local police within 24 hours of discovery and a written report is not obtained.
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15. Valuables or personal money or passport left unattended at any time (including in a vehicle or in the custody of carriers) unless deposited in a hotel safe or safety deposit box, any claims where you have not reported the incident to the hotel in writing and obtained an official report from the appropriate local authority.
Evaluation of the case
The Insurance Complaints Board notes that the scope of the content of the Insurance Policy is determined on the basis of the Insurance Contract and its Terms and Conditions. Therefore, the Insurance will compensate for such loss events which are, according to the Insurance Contract and its Terms and Conditions, defined to be compensable loss events. The scope of the cover of a voluntary Insurance Contract is, as a premise, a contractual matter. The Board notes that loss events other than those specifically defined in the Terms and Conditions do not, as a premise, become compensable on the basis of the Policies.
The Board further notes that, as such, it is obvious in the case at hand that the Insured A who had a travel insurance connected to their credit card, had not filed a Police report within 24 hours from noticing the luggage missing, as required by the Policy Terms and Conditions. According to A, however, they were not aware of such deadline and, be how it may, it must be considered unreasonably short. The Insurance Company notes that the Terms and Conditions are available at the Bank web page and that, in any case, the Policy would not compensate the loss or forgetting of any object, even if the Police report had been filed in time.
According to the principles of contract law, the Policy Terms and Conditions must be construed on the basis of their wording. Under the principle of uncertainty as referred to in Chapter 4 Section 3 of the Consumer Protection Act, if a term in a contract referred to in this Act has been drafted solely by the entrepreneur and if uncertainty arises as to the significance of the term, the term shall be interpreted in favour of the consumer. When interpreting the Policy Terms and Conditions, the wording, the concepts used, the Terms and the Insurance Contract as a whole will be taken into consideration. The assessment is made under objective standards. The Board also points out that other aspects to consider when interpreting the Insurance Terms and Conditions include that not all risks are insurable and that the purpose of the Terms and Conditions of a Policy is, precisely, to define the insurable risk within the scope of coverage.
In the case at hand, the Insurance Complaints Board has examined the applicable English-language Terms and Conditions provided and finds that considering the entity of the Terms, they must be logically and as a whole construed so that as a premise, no losses caused by the forgetting the luggage are intended to be compensated from the travel insurance but under certain circumstances, the loss or theft of luggage can be compensated if a Police report on the event is filed within 24 hours. The Board finds that, per se, the exclusion of the loss of forgot luggage from the scope of coverage of the Policy is an usual exclusion in travel insurance policies on the market but it is also a clause in the Terms and Policies which must be notified to the Insured, especially if the compensability is associated with a special requirement, i.e., the obligation to file a Police report within 24 hours from noticing the event.
In the case at hand, the Insured A also pointed out that they did not manage to find information on the contents of the Policy. The Board also notes that in the case at hand, we are faced with a group policy whereby A is an insured party. Therefore, the meeting of the Insurance Company’s information obligation is assessed under Section 76 of the Insurance Contracts Act. Under this stipulation, in a situation where no list of the insured is kept, the insured must be informed about the scope of cover, major exclusions, obligations of the insured under the contract, in a manner deemed fit in the circumstances. According to the Government bill (HE 114/1993), the responsibility for meeting the information obligation lies with the Insurer, even in cases where it has, for reasons of expediency, transferred information duties to the Policyholder. Providing information on the Policy at reasonable intervals means informing, for example, once a year.
According to the information provided by the Insurer, the information to the Insured on the travel insurance connected to the credit card in question is provided at the Bank web page but – due to human error – the English-language version of the Terms and Conditions was in a place different from the other language versions, and therefore more difficult to find. Later when A had noted that the Terms and Conditions could not be found, they have been transferred where the other language versions were but at this point, A’s loss event had already taken place. Based on the documentation provided and the above facts considered, the Board finds that the Insurance Company has neglected its obligations, under Section 76 Subsection 1 of the Insurance Contracts Act, to provide appropriate information on the contents of the Policy, also given the fact that they do not even maintain having sent such information on the Terms and Conditions. Obtaining the information must not be dependent on the Insured’s own activeness.
The Insurance Complaints Board finds that not only the exclusion of loss damage outside the scope of coverage of the Policy but also the filing of the Police report in certain situations of loss of the Insured’s property, are such essential exclusions of the insurance coverage as the Insured needs to be informed of as per Section 76 of the Insurance Contracts Act. In the case at hand, it has not been shown, in the manner discussed above, that appropriate information would have been provided regarding the exclusions, and it must be deemed that the Policy was in force with a content that the Insured had reason to understand, i.e., without the above-mentioned exclusions.
Final outcome
The Insurance Complaints Board recommends that the Insurance Company pay damages for the loss of luggage to the extent of the Policy Terms and Conditions.
The Insurance Complaints Board’s decision is unanimous.
INSURANCE COMPLAINTS BOARD
Chairman Norros
Secretary Hanén
Members
Haapasaari
Karimäki
Karhu
Korpiola