The Insurance & Financial Services Ombudsman (IFSO), Karen Stevens, has issued a warning to New Zealanders about the necessity of adhering to regulations, particularly when driving on beaches.
The advice comes in the wake of a case where an individual's vehicle was irretrievably lost to the sea, leading to a declined insurance claim.
A driver, referred to here as Clive (not his real name), faced a denial from his insurance company after attempting to clean his car's undercarriage by driving into the sea, a move that breached his insurance policy's terms.
Clive sought recourse through the IFSO Scheme, an entity tasked with resolving disputes between consumers and insurers or financial services. However, the IFSO Scheme sided with the insurer, citing a clear violation of policy terms.
Stevens pointed out the critical responsibility consumers have in maintaining their property, emphasising that insurance contracts often include clauses that demand reasonable care be taken to avoid unnecessary risk.
“Consumers have an obligation to take reasonable care of their property and belongings. House, contents, car, and travel insurance policies will often contain reasonable care conditions. If you don't follow these conditions, your insurer may decline your claim,” she said.
Stevens said that Clive's actions not only posed a direct risk to his property but also flouted specific local council bylaws regarding beach driving.
“It's important not only from a safety perspective, but also from an insurance perspective, that you follow your local council's rules for driving on a beach. These rules are in place for a reason, and they help prevent accidents from happening,” she said. “In Clive's case, it was clear that he hadn't taken reasonable care when he drove his vehicle onto the beach and into the sea. A reasonable person would not have made the choices that he made. Unfortunately for Clive, that meant his insurer was able to decline the claim.”
Stevens noted an ongoing trend of complaints to the IFSO Scheme, where insurance claims were denied due to policyholders not meeting their duty of care. She advised policyholders to thoroughly understand their insurance policy responsibilities and to proactively engage with the IFSO Scheme should they face challenges with their insurer, particularly if they believe they have adhered to their policy's conditions of reasonable care.
