In early 2018, the insured’s jet ski stopped working. He took the jet ski to his usual repairer, but they were at capacity, and could not take on the repairs. They recommended another repairer, who was performing repairs part-time, out of his garage. The insured dropped off his jet ski with this amateur repairer.
Several months later, the repairs still were not complete, and the insured was becoming worried. After making a few calls and emails and receiving no response, he drove to the repairer’s house. He found the property abandoned, and his jet ski gone.
After filing a police report, he made a claim for the stolen jet ski to his insurer. The insurer declined the claim, saying his policy did not cover theft by a person to whom he entrusted his jet ski. The insurer said he had voluntarily given possession of the jet ski to the repairer, so the theft was not covered by his policy.
The client thought the insurer’s interpretation of the policy was unfair. He said that if theft from a repairer was not covered by his policy, then the policy must be much narrower than the policies offered by other insurance companies. He said almost all marine insurance policies covered damage or theft while a vehicle was being repaired.
The insurer's view
The insurer said the policy was clear – the insured had entrusted his jet ski to the repairer, so the theft was not covered.
We agreed with the insurer’s interpretation of the insurance policy. If he gave possession of his jet ski to someone, and that person stole the jet ski, then the theft was not covered by the policy. We found the insurer had acted reasonably when it declined the claim.
We also found that the exclusion was not as narrow as the insured was making out. He had cover if his jet ski was accidentally damaged by a repairer, or if a stranger stole his jet ski from the repairer. The exclusion only applied if the repairer themselves stole the vehicle. We did not think this was unfairly broad, or much different to the policies offered by other insurance companies.
We recommended the insured discontinue his complaint. He accepted our recommendation, and chose not to take his complaint
No insurance policy covers all risks. It can sometimes feel unfair when you have suffered a loss but are caught out by an exclusion in your policy wording.
FSCL cannot overrule an exclusion outright, but we can investigate whether your insurer has interpreted the exclusion correctly, and whether it has applied the exclusion fairly and reasonably.
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