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A client lives in an upmarket suburb and their house is up a long driveway some 80m+ long and not visible from the street front. Our client was having a number of guests around and as a result left his keys in his vehicle in case the vehicle needed to be moved to allow people to come and go. At the end of the evening the client forgot that they had left the keys in the vehicle so proceeded to go to bed to wake in the morning to find his vehicle had been stolen.

The insurer has decided to decline the claim on the basis the client did not adhere to what they class as reasonable care. If the vehicle had been left in a public area unlocked with the keys in the vehicle I could understand there being some resistance in getting the claim accepted. I would also expect that the insurer would have to deem our client to be grossly irresponsible or grossly negligent in order to meet the legal test of reasonable care but has our client been grossly irresponsible? I'd suggest not but would welcome your thoughts.

The act of leaving the keys in the vehicle was also not a habitual practice and the vehicle was parked right outside our client’s front door up a long driveway out of sight. It is just unfortunate that an opportunist has stolen the vehicle.

I would have thought the fact that the vehicle was up a long driveway and not visible from the road front along with the fact that our client does not normally leave the keys in the vehicle that the legal test of reasonable care to decline a claim could not be met?

Can I have your feedback and thoughts on this matter please?

Steve Keall replies:

Really interesting situation. The Courts have considered the issue of what reasonable care can mean in insurance policy like this. As you have indicated it cannot be mere negligence because one of the functions of the policy is for the customer to insure against his/ her own negligence. The insurer would need to establish at a minimum something more than negligence (there is a longer discussion about whether it is something more than that; gross negligence/ recklessness).

In this case, there was a break from what I assume was the customer's usual practice of locking his vehicle. He left his keys in it so it could be moved, because he was having a party; where the car was at the end of an 80m driveway, out of sight of the street (and so the keys could not be observed as they might be if it had been parked on the street). At the end of the night, he forgot he had left his keys in the car.

The act of forgetting, as it has arisen in this particular case is, I suggest mere negligence. The forgetting is contextualised by the setting: the driveway and being out of site. It follows that the insurer cannot rely on the provision requiring the customer to take reasonable care because it could not establish there has been something more than negligence.

June 2021

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