Adjudication by Ombudsman General Insurance (Motor)
The Insured’s claim for theft of her vehicle was rejected by the Insurer on the ground that the authorised driver of the vehicle failed to take reasonable precaution to safeguard the vehicle from loss by leaving the vehicle unattended with the key in ignition switch and the engine running prior to the theft, in breach of condition 7(c) of the policy.
The Case Manager handling this dispute gave her recommendation favouring the Insurer. The Insured who did not accept the recommendation has now referred the dispute to Ombudsman for Adjudication.
The only issue to determine here is to see whether there was failure on the part of the authorised driver of the vehicle to take reasonable precaution from the theft, thereby breaching condition 7(c) of the policy.
Condition 7(c) of the policy provides as follows:-
7. OTHER MATTERS
This policy will only be operative if:-
(c) You have taken all reasonable precautions to safeguard Your Vehicle from loss or damage.
The loss adjuster’s investigation report reveals that the authorised driver had left the vehicle unattended with the key in the ignition switch and the engine running whilst he and his wife went to the café to buy drinks, when an unidentified man got into the vehicle and drove away.
The above findings is supported by the police report lodged by the authorised driver on 16.2.2016 and the Statutory Declaration affirmed by the authorised driver on 19.8.2016.
Adjudication and reasons
Based on the above key findings, the authorised driver has breached condition 7(c) of the policy. This breach will entitle the Insurer to repudiate the claim. It must be remembered that leaving the ignition key in a vehicle and moving away is a potential invitation to theft. In the case of Hayward v Norwich Union Insurance Ltd (2001) 1 ALL E.R 545, the Court of Appeal decided that the breach covered a situation where the insured left the ignition key in the car by choice or inadvertence and had moved away from the key.
It is a principle of insurance law that the rights and liabilities of the parties to the contract of insurance are governed by the terms and conditions stipulated in the policy.
It is also important to note here that if the authorised driver in the present case here have taken the necessary precaution by not leaving the ignition key in the car, in all probability the said theft could have been avoided.
Based on the above, we find that the repudiation of the claim by the Insurer was in accordance with the terms and conditions of the policy and the Case Manager handling this dispute gave the correct recommendation.
This Adjudication is in favour of the Insurer.