It is often difficult to satisfy Proof of Loss requirements when making a travel insurance claim for personal effects which are stolen, damaged or lost.
To satisfy Proof of Loss requirements, the traveller must:
- Report the theft, damage or loss to the police or to the nearest government authority within 24 hours;
- Provide a copy of the written report - certified by the police or authority - to the insurer;
- Contact the insurer / make the claim within 30 days of returning home;
- Explain the loss to an insurance investigator; and
- Complete a written Proof of Loss report form and return it to the insurer within 30 days.
Travel insurers will decline a claim if the police report, valuations, original receipts or proof of ownership are not satisfactory.
This is how disputes about Proof of Loss requirements are dealt with -
Two travel insurance determinations by the Financial Ombudsman Service Australia (FOS)
FOS determines disputes involving travel insurance claims, if the insurer rejects a traveller’s claim. FOS issues determinations on these disputes, which contain useful insights.
These are two examples dealing with Proof of Loss:
Determination case number 213720 The insured’s claim was for the contents of a bag stolen by a taxi driver in Cairo. The theft was reported to the police. The bag contained jewellery for which purchase receipts were not available, but the items stolen were corroborated in the police report and in photographs. FOS decided that a payment of $2,000 be made by reference to the gold price.
Determination case number 227488 The insured’s claim was for the contents of a suitcase, which was not taken out of a taxi in Makati, in the Philippines, because it sped off. She tried to report the theft to the local police, but she was told to go to the Public Prosecutor. She completed a statutory declaration at the Town Hall which satisfied the reporting requirement. She claimed $9,700 for a Louis Vuitton Boite Bijoux jewellery box which she alleged was purchased on 5 May 2006 by her friend M in Paris. Her claim failed because she failed to prove ownership – there was no proof of purchase and no photographs. She also claimed $3,115 for a Cartier watch. Based on a receipt for the purchase and two subsequent valuations, that claim was accepted.
Travel insurance decision by the Supreme Court of New South Wales
Recently, a claim for the loss of an 18 carat gold Rolex Oyster Perpetual Watch, was considered by the Supreme Court of New South Wales, on appeal from a Local Court Magistrate. The decision is Kalloghlian v Chubb Insurance Company of Australia Ltd  NSWSC 902 (Davies J).
The facts were: The traveller ‘lost the watch whilst at Copacabana Beach in Rio de Janeiro in July 2014. It either fell off his wrist or was taken from him by an unknown person. He made no formal report of the loss to a police station’ (he said he tried to do so, but the police were not interested). He had ‘no receipt or other documentation relating to the purchase’ (it was purchased from a jeweller in Syria with funds from his parent’s account), and had no travel documents because he had lost his passport and had travelled to Syria by car. He did have evidence that the watch was cleaned in June 2014. He claimed $25,000.
Justice Davies said: ‘This was a classic case where a claimant on an insurance policy had almost only his own word to prove ownership or possession and loss of the object for which the claim was made. An insurer might take the view in such circumstances that a plaintiff would need to commence proceedings so that his evidence could be given on oath and tested in a court.’
In short, the insured needed to overcome the deficiencies in the Proof of Loss by issuing legal proceedings and giving evidence in a court.
Justice Davies elaborated: ‘There are cases, whether involving insurance or other matters, where a plaintiff has no corroborative evidence of essential facts but the Plaintiff’s evidence is believed with the result that he or she is successful in the claim.’
Justice Davies reviewed the Magistrate’s reasons for decision and found them to be deficient. He concluded that the Magistrate had not sufficiently considered the insured’s evidence.
He did not decide the claim, but remitted the case to the Local Court for a re-trial before a different magistrate.
This decision of the Supreme Court of New South Wales goes to show that in cases where all the requirements of a proof of loss are not available, issuing court proceedings is a way to overcome the lack of Proof of Loss.