IFSO Case Study

Mr P held third party, fire and theft cover on his motorhome. In 2021, Mr P died and his son, Mr G, received his motorhome.

Mr G changed the registration of the motorhome into his name. He also listed the motorhome on TradeMe, and it was purchased for $35,000 using the “Buy now” function. The buyer sent him a screenshot of an online transaction as proof of payment, and the motorhome was collected later that evening.

The following morning, Mr G had still not received the payment and realised the screenshot was a fake.

Mr G made a claim to the insurer. The insurer declined the claim, because there was no cover for the motorhome at the time of the loss, because the policy was not in Mr G’s name. It also said the loss was not covered under the policy, because the loss was the proceeds of the sale, not the motorhome.

Mr G complained, because he believed the loss was not the proceeds of the sale but, rather, the theft of the motorhome, and that it should be considered an accidental loss.

The IFSO Scheme found that Mr G voluntarily gave the motorhome to the buyer. This meant that the motorhome was not stolen and, therefore, the loss was not caused by “theft”. Because ownership had been transferred to the buyer, the buyer became the new owner.

The IFSO Scheme believed the evidence indicated the loss was the proceeds of the sale; however, even if the loss was the motorhome, the loss was not caused by “fire, theft or illegal conversion”.

This meant there was no cover under the policy and the insurer was able to decline the claim.

Complaint not upheld.

Consumers have obligations to take care of their property under insurance policies. It is not theft if you invite someone into your home, or allow them to take something, and it won’t be covered.

June 2023

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