The Insurance & Financial Services Ombudsman has investigated a complaint regarding house and contents insurance.  The insured had a policy in place to cover the contents of a rental property, but then changed the location to a house that he had purchased and took out house insurance and contents insurance.

Sometime later a bath was left running and carpet was damaged in several rooms of the house.  The insurer agreed to replace the damaged carpet, but not the other carpet in the rooms which had not been affected because the insured had not taken out the “matching carpet” optional extra when they took out their insurance. 

The Ombudsman’s Office advised that as the insured was not a homeowner he would not have taken out carpet insurance with his previous contents policy.  He should therefore have been offered the optional extra when changing over to the new house that he owned.

The insurer agreed to back date that optional cover (for payment of the additional premium) and it then accepted the claim and paid for replacement of the carpet in all rooms.

When you are taking out cover it pays to very carefully read the terms of the policy to ensure you are getting cover for everything that you want and especially if you are changing the type of insurance cover.

Alan Knowsley
Insurance Lawyer Wellington