Christmas is a busy time filled with activity, which is why it can be easy to overlook details such as your insurance. To help you get through the festive season as safely as possible, IAG claims expert Chris Kiddey has been answering listeners’ insurance questions on Newstalk ZB’s show, Sunday Mornings with The Resident Builder, which airs 6am to 8am.
In the last phone-in (Sunday, 23 November 2014), Chris answered questions about purchases made online through sites such as TradeMe and insurance options for people who are moving home. He also had some useful advice for business owners whose trade involves moving other people’s goods.
Chris returns to the show in the New Year. In the meantime, we welcome your questions on insurance. Please post your query in the comments section at the end of this blog and we’ll do our best to respond to you within 24 hours.
Scenario: You’ve found the perfect gift on TradeMe and the seller has arranged to have it freighted from Auckland to Nelson by a carrying company. The item is damaged on route and the carrier won’t accept liability. You’ve approached your insurer to make claim under your contents policy. Does your contents insurance cover you?
Most contents policies do not provide cover for items purchased online that are damaged in transit to the customer’s home. In some cases, a claim may be accepted where the insured has had the item permanently in their possession since buying it, such as the purchase of a camera on holiday – provided it is within New Zealand and not a loss that should be covered under travel insurance, or, for example, if the insured is transporting a Christmas gift they’ve bought to their home. However, in cases where the item was simply dispatched to the receiver by a remote seller, they would not be covered under their contents policy.
Why is this?
In the example of the Christmas gift being transported home accompanied by the insured, most insurers (including IAG) would consider the risk to be within acceptable boundaries. In the scenario where the item has been transported by a carrier, the risk is not known. First it is in the possession of someone who is not known to the insured or to the insurer, then it is with a moving company before it finally reaches the insured. Your insurer cannot know all of the risks involved, and therefore cannot be expected to provide cover. Generally speaking, you should only expect your contents policy to cover that item from the moment you receive it – and that cover would not include any damage that occurs before that moment.
An item I bought online has been damaged while in transit. What can I do about it?
You are best off speaking to your insurer about what, if any, action could be taken against the carrier, i.e. whether their claim can be taken to a Disputes Tribunal. The outcome would depend on the conditions of the carrier’s contract; was it at the owner’s risk, and if so should the seller be a party to the hearing as well? When did you pay for the item and what does that say about the situation? What transit conditions did the seller post, and what did it cost you?
Scenario: A homeowner with contents insurance is moving home. They are carrying their flat screen television out of their property when they trip on the footpath and break the television. Is there cover available through their contents insurance?
Most insurers would conclude that the customer’s contents insurance does not cover them in this scenario. In general, contents policies cover a person’s belongings when they are in the home or when they are temporarily removed from the house. However, they do not usually cover contents when they are being moved to a new home. This is because the homeowner has permanently removed the television from their home.
In general, contents policies offer only very limited cover – if any – for items that are broken or damaged while moving home. For example, if the homeowner finds their belongings to be damaged or broken when unpacking the moving truck, this would not be covered by their contents insurance. However, if the items are damaged or broken while in a moving truck that is involved in a collision or accident, cover may be provided. The best thing to do is to check your policy in advance and, if you’re not sure what it covers, contact your insurer.
Isn’t the moving company liable?
Not necessarily. A moving company doesn’t always have to take complete responsibility for items while they’re being moved. There is cover under the Carriage of Goods Act for up to $2,000 per item. That is the most the company will be liable for, whether the item is an expensive TV or a grand piano. We would advise that when choosing a moving company, check the contract you are required to sign. A common type of contract is one that is at “owner’s risk”, which means that the carrier is not responsible for any unintentional loss or damage, with the exception of deliberate damage.
If I get my friends and family to help me, but let my insurer know in advance, am I covered?
Simply telling your insurer how you intend to move will not provide you with additional cover to your existing contents policy. Depending on the type of cover you have, your insurer may say to you that in this scenario, you are taking on your own risk. You should then consider whether you would prefer to pay for transit cover, or have some cover under the Carriage of Goods Act through hiring a moving company, or take on the risk yourself and hope nothing will be damaged in transit.
So how can I make sure my belongings are fully covered when moving?
Most insurers can offer transit insurance that provides cover for your contents while you’re moving home. Speak to your insurer in advance of your move date, and they’ll help arrange suitable cover for you.
Business goods on the move
Scenario: A self employed business owner buys a truck and trailer unit for their work, which involves shifting other people’s goods. Do they need public liability insurance to cover them if they damages some else’s goods?
Certain types of policy, such as Public Liability, cover your legal liability or accidental injury to other people or damage to their property, and certain types of commercial motor vehicle policy can also be ‘upgraded’ to cover goods being transported in your care. The question a business owner needs to ask is whether they can afford the cost in the unfortunate circumstance that those goods are damaged. As always, the best thing to do is discuss this with your insurer before the need to make a claim arises.
Post your insurance questions below.