Account of the case
The Insured A was travelling for holidays in Sweden and, accidentally, dropped their iPhone 13 in a lake. Despite attempts, the phone could not be found. A filed a claim for damages for the lost phone from the travel insurance associated with A’s credit card.
The Insurance Company issued a decision on the claim, referring to the Terms and Conditions applicable to the case and stated that the loss of the mobile phone cannot be compensated based on A’s travel insurance. According to the decision, the Policy does not cover any loss or forgetting in cases other than the lost object having been in safely locked premises in a hotel or in a traffic operator’s possession. Moreover, the case must be reported to a local Police within 24 hours from the loss.
A requested that the Insurance Company re-examine the case because it was not a case of loss of the mobile phone but it getting damaged since a phone falling in water would have anyway been damaged. Moreover, a Police report cannot be considered necessary in the case at hand because it was known that nobody stole the phone but it was known from the beginning that it fell in the lake. A refers to Article 17 of the Policy Terms and Conditions according to which a situation similar to the case at hand must be considered reimbursable by the Policy.
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. Moreover, A finds that the loss of the phone must be compensated on the basis of the travel insurance. The phone was lost because it fell in the lake, and due to the depth of the lake, it could not be recovered from the lake bottom. The phone was not stolen but it got immediately damaged when getting wet. Therefore, there was no need to file a Police report. Even if the phone could have been recovered from the lake, it would have been broken, regardless.
In the additional writ sent after the reply by the Insurance Company, A wants to underline that the claim for compensation has been made due to the damage to the phone, not for its loss. A has given all the necessary information to the Insurance Company, and no Police report can be requested in a case when it is clear that no crime was committed. Moreover, the Terms and Conditions do not take a clear stand on a situation where the recovery of a damaged object would be impossible due to safety reasons. Moreover, it must be considered probable that a phone dropped in the water would, in every event, be damaged beyond repair.
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. Having gone through the Terms and Conditions applicable to the case, the Company repeats that since no Police report was filed, the damage cannot be compensated based on the travel insurance.
After the additional writ by A, the Insurance Company issued an additional reply pointing out that in a situation where an object is damaged, the Company must be sent a report on the damage or a repair plan no later than within seven days from the return to the country of residence. Since no information on the state of the phone was filed in the case at hand, the fact remains that the compensation cannot be paid.
Recommended solution
Formulation of question
In the case at hand, the dispute is about the question whether A’s phone dropped in the lake should be compensated on the basis of the travel insurance.
The applicable Policy Terms
According to the Article 2.6 of the Terms and Conditions, (Baggage and personal money), Your travel insurance compensates for baggage for a single trip and each insured person travelling together when the case involves the theft or damage of baggage and valuables.
Under the title “What does insurance not cover?” of the same Article, the text says:
- The disappearance or forgetting of an item other than when in the locked safe of transport company or hotel
- Events involving the disappearance or theft of baggage or valuables which have not been reported to the local police within 24 hours of noticed, and for which written explanation or report have been obtained. A holiday representative’s account is not sufficient.
- Any items of the insured damaged during a trip when the insured has not obtained a loss / repair report from the appropriate agent within seven days of returning to the country of residence.
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 Policy 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 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 Insured A has filed for compensation for the damage to their phone that was dropped in the lake. However, the phone had sunk down in the lake so that the Insurance Company considered that it was lost. According to the Policy Terms and Conditions applicable to the case, the compensation for lost luggage is paid only under certain circumstances such as when the item has been in the locked safe of the party organising accommodation or transportation. In other situations, the Policy covers luggage that has been stolen, if the theft has been reported to the local police within 24 hours. A damaged object will also be compensated, should there be a report on the repair cost or on the fact that it has been damaged beyond repair.
The Insurance Complaint Board finds that in the case at hand, it is, as such, undisputed that A had lost their phone in the lake as a consequence of dropping it and that the phone could not be recovered from the lake after it had sunk there.
In the case at hand, the Insurance Complaints Board has examined the applicable 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, the intention of the travel insurance is not to compensate for any loss caused by the losing of luggage. According to the Terms and Conditions, the Insurance Policy covers damage and thefts of the object. The loss or theft of the luggage can exceptionally be compensated if the object has been stolen from a locked premise and the Police report on the case is made within 24 hours. In the case at hand, this is not a situation meeting the above description. In the case at hand, A’s phone has been lost in the lake as a result of it being dropped in the water, and therefore the Insurance Company has, based on its Terms and Conditions, entitled to refuse compensation for the damage to the phone.
Final outcome
Based on the above grounds and the information available, the Insurance Complaints Board finds that the decision by the Insurance Company is in line with the Policy terms. The Board does not recommend that it be changed.
The Insurance Complaints Board’s decision is unanimous.
INSURANCE COMPLAINTS BOARD
Chair Norros
Secretary Hanén
Members
Haapasaari
Kankkunen
Karimäki
Malmberg