Question:
One of our insureds had their business vehicle stolen. There were some personal items in the vehicle that were stolen with the vehicle. The vehicle portion of the claim has been settled. Due to the high excess on personal contents, it is not economical for the insured to submit a personal contents claim.
The commercial motor policy has the following extension:
"Personal effects: We will extend this insurance to cover accidental loss to the driver and employees of the insured’s personal effects as a direct result of accidental loss to the insured vehicle that is covered under this policy.
“For the purpose of this extension ‘personal effects’ means any item of clothing (including reading and sunglasses) or any personal item normally carried (such as a handbag, wallet, personal music device or mobile phone) but excluding any laptop or item of luggage. The personal effects are insured for their market value."
The insurer agrees to pay on "umbrella, headphones, Mac Pac jacket" .
However, they refuse to pay on: "gumboots (adult and kids), body board, Hockey sticks and Hockey bag, elevator security key that allows access to secure parking of the vehicle (which was kept permanently in the vehicle)".
The insurer's argument is: "The elevator key is not covered under the “personal effects” extension or CMV policy, as it relates to a building."
"Sports equipment is not normally carried on your person, nor are gumboots, hence it is outside the scope of cover provided by this extension. "
In our view, the wording is quite broad and there is no definition of "item of clothing" and "any personal item normally carried", hence we need to revert to the ordinary meaning of these words.
If a wallet is an item that is normally carried, then so is the elevator key that allows access to a secure car park. With regards to the gumboots and the sports equipment - these were kept in the vehicle as the insured's child has sports several times a week so for this particular insured these items were normally carried in their vehicle.
The policy doesn't state what "normally carried" means - i.e. if this is normally carried in a vehicle, on the person or both.. If a jacket is an item of clothing normally carried so are gumboots given we are in the middle of the winter...
Would appreciate your guidance with regard to policy interpretation.
Crossley Gates replies:
The extension is covering the personal effects of the driver and any employee only.
The definition of 'personal effects' means this covers:
1. Any item of the driver/employee's clothing, and
2. Any personal item (by implication beyond clothing) the driver/employee normally carries in the car, but not a laptop or any luggage.
Note:
a) The word 'normally' relates back to the driver employee so will be subjective - the test is what is normal for them.
b) The examples of 'handbag, wallet, personal music device or mobile phone' may have some limiting effect on the breadth of the words 'personal item', but will not be limited to those items alone.
Putting this all together, I suggest:
(i) The elevator security key is covered as it is a personal item of the driver/employee normally carried in the car.
(ii) The driver's/employee's gumboots are covered as they are an item of clothing.
(iii) The kids' gumboots and hockey gear are covered as personal items normally carried if this is what the driver/employee says.
(iv) The body board may be in doubt, depending on what the driver/employee says.
