FSCL Case Study

A client arranged travel insurance for her holiday in Spain through an insurance broker. The broker asked her about the details of her holiday and whether she had any pre-existing medical conditions. The broker did not ask whether she intended to travel with any high value items.

The broker recommended a comprehensive policy, which the client agreed to. The broker sent  the policy wording with their quote, and again with the certificate of insurance (when the policy had been purchased). 

The broker told the client to read the policy wording, including the schedule of benefits, so she knew what she was covered for. The broker also invited her to contact them if she did not understand her cover.

The client did not read the policy wording. Unbeknown to her, the policy had a $1,500 limit per item for personal baggage. She was also unaware she could buy additional cover for high value items.

While on holiday, the client slipped on a wet path and damaged a bracelet she was wearing. The cost to repair the bracelet was around $6,600. The insurer accepted her claim for the damage to the bracelet and paid her $1,500, in accordance with the policy limit.

The client wanted the broker to pay the balance of the repair cost, which the broker declined. The client asked FSCL to help resolve her complaint.


The client said the broker should have asked her whether she intended to travel with any high value items and advised her of the policy limits for personal baggage.

The broker said the client had multiple opportunities to read the policy, including the policy limits, and to ask them questions about the cover. The broker also said it was not reasonable to expect them to discuss every high value item a client intends to travel with.


Insurance brokers have an obligation under the Financial Advisers Act 2008 to exercise reasonable care, diligence, and skill. In practice, this means insurance brokers should make reasonable enquiries so they can arrange appropriate cover for their client.

FSCL was of the view that the broker should have asked the client whether she intended to travel with any valuables given many common personal baggage items cost more than $1,500, such as jewellery and electronic devices. 

The client expected the broker to provide her with professional advice and, as the broker was the insurance expert, FSCL thought it reasonable for her to rely on the broker’s expertise and guidance.

FSCL also found that the client would probably have left her bracelet at home, or would have arranged additional cover, if the broker had advised her of the risk of taking the bracelet with her.

However, FSCL found that the client had contributed to her loss by failing to read the policy to check that it met her needs.


FSCL suggested that the client and the broker should share equal responsibility for the loss. Both parties accepted our view and the broker paid the client around $2,500, being half of the balance of the cost to repair the bracelet.

Insights for consumers

Taking high value items on holiday can be risky. It is important for consumers to read the policy wording, so they are aware of their cover, including policy limits. Personal baggage limits vary between policies and some policies have different limits for different categories of personal baggage.

If a consumer has a high value item they want to travel with and do not want to take the risk that the full cost would not be covered if the item was lost or damaged, they should contact their travel agent, insurance broker or insurer before they travel to see whether they can buy additional cover.

Insights for participants

It is important for insurance brokers to ask about high value items their client intends to travel with. Common high value items people travel with include jewellery (such as rings and watches), electronic devices (such as cameras and laptops), medical equipment (such as hearing aids), and designer clothing and accessories.

Brokers should also explain the risk of travelling with high value items that are not specified on the policy.

June 2021

Training & Qualifications

Professional IQ College offers workshops, online courses, webinars and qualifications.
For upcoming events:

Click here

Knowledge Base

Where members can access industry Resources & Media Content

Click here