The Insurance & Financial Services Ombudsman Scheme (IFSO Scheme) has marked 30 years of assisting New Zealanders in resolving complex insurance disputes free of charge and independent of the industry.
In the 2024-25 financial year, the IFSO Scheme accepted a record 600 disputes for investigation, with 96% relating to insurance matters. IFSO Karen Stevens noted disputes have steadily increased in recent years.
“Changing expectations about what insurance should provide – especially as premiums increase – seem to be shaping how consumers feel about their insurance, and this is leading to more disputes being brought to the IFSO Scheme,” said Stevens.
Stevens noted that while many claims are declined, insurers often have valid reasons under the policy terms.
“For example, someone may not have followed the conditions in their policy, or there are exclusions which apply. While this can be very disappointing for the customer, we’re unable to uphold complaints where the policy has been applied correctly,” she says.
A recent case featured in the IFSO Scheme’s 2025 Annual Report underscores the importance of understanding policy conditions and taking reasonable care of valuables.
Alex (name changed for anonymity) and his wife returned from a trip with designer clothing and jewellery valued at $31,000. After dropping his wife at work, Alex parked at home and left the items in the car overnight. The next morning, the car had been broken into, and all items were stolen.
Alex submitted a contents claim, but the insurer declined it, citing a failure to take reasonable care – a condition of the policy. The insurer noted that high-value items were left visible overnight, and there had been a recent theft from the couple’s other vehicle. Alex then brought the matter to the IFSO Scheme.
The IFSO Scheme found that leaving such valuable items unsecured and visible in the car overnight posed a significant and obvious risk. The case manager also noted that Alex’s wife had instructed him to bring the items inside.
On review, the Scheme determined that Alex had failed to take reasonable care, and the insurer was entitled to decline the claim.
“Even if you have insurance, you need to make sure you take reasonable care of your property. Our role is to make sure decisions are fair, based on the policy, and on all the facts. Unfortunately for Alex, he wasn’t covered because he’d failed to meet the conditions in his insurance policy,” said Stevens.
Stevens highlighted that consumers should review their policies carefully, as definitions of “reasonable care” can differ. Common conditions include maintaining the home, preventing further damage to contents, avoiding risky driving behaviour, and keeping valuables secure while travelling.
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