“You must, at all times, take reasonable steps to safeguard the mobile device from loss, damage or theft” – policy wording that a client challenged when her cell phone claim was rejected by her insurer.

The insurer’s assessment of the claim

Ms K submitted a claim to her insurer following the theft of her insured cell phone. The insurer rejected the claim on the grounds that Ms K failed to take reasonable steps to safeguard the mobile device at the time of the loss, which was a condition of cover.

The insurer specifically relied on the following exceptions in the policy wording:

Exclusions applicable to all sections of the policy (What you are not covered for) –

viii) Loss or damage arising from the mobile device where it is left unattended in a public place, place of recreation, office, mall or social occasion where it is vulnerable for easy removal or damage.

At claim stage, Ms K advised her insurer that her husband had invited a work friend for a braai at their holiday home. According to Ms K, the cell phone was left outside on the patio table when they went inside the house.

In the insurer’s assessment, it took specific note of the following:

●	the device was left unattended
●	the braai was a social affair or social gathering
●	Ms K created an opportunity for the handset to be removed without much effort as it had been left unsupervised in an open place
●	there were other premises close to the house that she was staying in
●	the cell phone was left exposed to passers-by and occupants of surrounding properties.

Ms K’s defence

Ms K was not in agreement with the insurer’s rejection of the claim. She mentioned that, if they were having dinner at a restaurant and she left the phone unattended on the table and it got stolen, then she would have accepted the rejection.

In this case, the cell phone was left on the patio table of a private property and the braai was not a social occasion as she was with her family. Furthermore she highlighted that, according to her, a social event would be where there are more than three people present, including friends, family and people that you might not know, that had been invited by someone else, not just three people sitting down to have dinner.

OSTI’s findings

OSTI agreed with the insurer’s assessment. Their view was that the actions of Ms K, under the circumstances, were reckless and that she was in breach of the policy condition. As a result the insurer’s decision to decline liability on the claim was therefore upheld.

In the light of Customer Services Week we are all reminded of the TCF outcomes. Outcome 3 specifically states that “customers are given clear information and be kept appropriately informed before, during and after the time of contracting. Financial advisers must pay due regard to the information needs of the customers, and communicate information to them in a way which is clear, fair and not misleading.” Make an effort to work through the terms and conditions and use some of these cases studies as reference.

Click here to read the case as published in the Ombudsman Briefcase.