Insurance FAQs

Pedal cycles

The Low-Powered Vehicles and Pedal Cycles Regulations (S.L. 65.26) provides the following:

Regulation 4A thereof states that:

“No power assisted pedal cycle, including pedelecs, whose electric motor has an output of more than 250 watts may be used  on the road unless it is covered by a third-party risks insurance in compliance with the requirements of the Motor Vehicle Insurance (Third-Party Risks) Ordinance.”

Accordingly, power assisted pedal cycle, including pedelecs, whose electric motor has an output of more than 250 watts, may be used on the road only if they are covered by a third-party risks insurance incompliance with the requirements of the Motor Vehicle Insurance(Third-Party Risks) Ordinance.

In addition, in terms of regulation 5 of S.L. 65.26,  power assisted pedal cycles whose electric motor has an output of more than 250 watts would also need to be registered with Transport Malta and age limits and other requirements are imposed, such that no person shall ride power assisted cycle having an output of more than 250 watts on a public road unless he or she has reached the age of sixteen years; is in possession of an identity card; and has satisfied Transport Malta that he or she has some knowledge of the Highway Code through a theory test.

Insofar as mopeds and motorised bikes are concerned, regulation 20 states that:

“No moped (motorised bikes) shall be ridden and no light quadricycle (Quad Bikes) shall be driven on a public road unless the vehicle is covered by a third party insurance in compliance with the requirements of the Motor Vehicle Insurance (Third-Party Risks) Ordinance.” 

Accordingly, the above-mentioned vehicles would need to be be covered under a private motor or motor cycle insurance policy (depending on the insurer’s specific internal procedure) and in terms of regulations 17 and 18 of S.L. 65.26, would even require registration with Transport Malta, a theory test and road licence.

Horse drawn vehicles

To what extent, if any, are karozzini (horse-drawn carriages ) covered by an insurance policy? If they are, what sort of cover would (or should) they have?

Horse Drawn Vehicles are regulated under the Use of Animals and Animal-Drawn Vehicles on the Road Regulations, 2016.

These regulations fall under the remit of Transport Malta and cater for both compulsory licences and insurance when using any horses-drawn carriages on public roads.

These regulations will increase the horse owner’ s responsibility, especially in the eyes of insurers who would only pay if these are licensed and insured as they would otherwise be acting illegally.

For further details in this regard, please contact Transport Malta via their website.

If a driver injures a horse, to what extent (if any) would a motor insurance policy covers injuries sustained to the horse?

Should you be involved in an accident with a horse-drawn carriage, which is your fault and the horse is injured, your claim would be covered under the third party property damage section of your motor insurance policy.

This section is subject to a minimum legal limit of €500,000. All accidents involving animals as third parties would be considered as property damage and thus a claim would be subject to that limit.

In order to determine the exact amount to be paid, veterinary experts would be engaged along with other experts in the field (breeders, importers etc.)

Car repairs and repairers

Is the insurer entitled to impose where I should be repairing my vehicle following an accident under a comprehensive policy? What if I am not to blame, can the third party insurer direct me to repair at a particular garage?

If you happen to have a comprehensive motor insurance policy, under the section which deals with cover for loss or damage to your vehicle or the section covering loss or damage you cause to third parties, you are likely to find the following condition (or similar wording):

       “At our own option, we may repair, reinstate or replace your vehicle or any part of it or its accessories or spare parts or may pay the amount of loss or damage.”

In other words, the insurer reserves the final say as to how it will put you in the same position as before the loss. Therefore, in terms of this particular condition, there is nothing that precludes the insurer from instructing you to use the services of a particular garage which it appoints for repairs to be carried out. This in fact is a very common practice for claims under other policies such as travel insurance (in respect of luggage repairs or replacement) and home insurance (when replacing items such as glass and carpets).

If you are claiming under the policy of a third-party, that insurer may also direct you to repair at a particular garage as long as in doing so, that insurer is putting you back into the position you were before the collision.

In such instances, if you are unsatisfied with how the repair works have been carried out, there is recourse against the insurer (who directed you to repair at its appointed repairer). This is especially useful if the appointed repairer fails to come up with reasonable and acceptable solutions for any unsatisfactory work. When, on the other hand, you choose which garage will repair your vehicle, you would be solely responsible for any bad workmanship as the repairer would have been your choice (and not the insurer’s).

It is therefore important that your never sign the full and final settlement form unless you are completely satisfied with the work done on your vehicle.  If the repairer offers a repair guarantee, ask for such a guarantee to be provided in writing.

Drink Driving

My car was been hit by a vehicle which was being driven by someone who is likely to have been under the influence of alcohol. I am insured on third party basis. My insurer was unable to help me much because I was unable to claim under my policy. However, when I approached the insurers of the other party, I was told that they would be unable to pay for damages sustained to my car. I think this is grossly unfair. What are my rights? 

A valid motor insurance policy is intended to cover damages or injuries caused to third parties by a negligent driver. However, an insurance policy will list a number of exceptions to this general rule. For example, an insurance policy is unlikely to provide cover to an insured driver if such driver causes damages to third parties while driving under the influence of alcohol or drugs.

In terms of law, however, an insurer would still be obliged to pay compensation awarded in a Court judgement or an arbitration decision to the injured party in spite of the policy exclusion on drink driving. If an insurer is aware that its client has caused damages to third parties as a result of drink-driving, the insurer may decide not to consider the claim from the third party until a judgement or arbitration award against its policyholder is obtained. Only once a judgement has been delivered is the insurer required by law to pay you for any damages you sustained. It is important to note that the insurer would be able to claim back such money from its policyholder on the basis that he or she had breached an important policy condition. In some respect, therefore, it is a matter of “when” rather than “if”.

Given that you are insured on third party basis, you are unable to claim under your own policy and your insurer may only assist you to a certain extent, mainly by giving you advice. You will most likely need to engage a lawyer to take legal action against the person who caused you damages and this person’s insurer. If the damages sustained do not exceed €11,646 and there are no injuries, fatalities or damaged public property involved, your lawyer will refer the case to arbitration in terms of the arbitration legislation. This means that the proceedings are faster and less costly. If, however, the damages exceed this amount or there are injuries involved, then the case cannot be referred to arbitration but rather to the Civil Court.

In this legal action, your lawyer will seek to prove that the other party was responsible for the damage or injuries caused. If it can also be shown that the other party was under the influence of alcohol then it is more likely that he or she will be found to be at fault. Of course, one would need to bring proof that the third party who caused you damages was truly under the influence of alcohol whilst driving. Normally this would be either evidence given by a witness or even better an official report following a breathalyser test carried out by the Police. It is important to keep in mind that this will not change the fact that the insurer would still have to pay you for damages sustained even if the responsible party was found to be under the influence of alcohol. Ultimately you will receive compensation once it is decided that the other party was to blame, irrespective of whether he or she was drunk or not.

An insurer may not always wait for a court judgement or an arbitration decision to compensate you and may decide to settle your claim without requiring legal action to be taken. This is likely to happen where fault is clear and where the damages are not substantial and the person who caused the damages agrees to refund the insurer in full. This removes the need to go to arbitration or the Courts.

It is worth pointing out that had you been insured under a Comprehensive policy, you would have been able to claim under your policy (you would however have to pay any policy excess and your No Claims Discount may be temporarily reduced). Your insurer would then commence proceedings against the third party insurer to attempt to recover monies it paid in respect of your claim. In respect of uninsured losses you sustained however, such as replacement car rental costs or compensation for injuries, you would probably still need to engage the services of a lawyer to obtain the compensation due to you by law.

Drink driving convictions are taken very seriously by insurers. Most motor insurance policies will not cover damage or liability caused in an accident where the driver was under the influence of alcohol, drugs or any other illegal substance. As a result, damage to one’s vehicle will not be recoverable and an insurer will be able to recover from the insured any amounts paid as compensation for damage or injuries caused to third parties in such circumstances.

Besides this, convicted drivers returning to the roads may face difficulty in obtaining an insurance cover or else may be required by the insurance company to pay higher premium

Oil Spills and skidding

I was driving one day and skidded on a rather big oil patch causing damages to third party vehicles. I don’t think I should be blamed for these damages. What are my rights? 

Many drivers are aware that an oil spill makes a vehicle harder to control and brake but also increases the probability of skidding. The Maltese Courts consider a skid as a normal circumstance which, in itself, is not enough to put neither the blame nor discharge the driver from causing the accident. As in any other type of incident, the person being blamed should prove that the accident did not happen as a result of him or her being grossly negligent or reckless. Therefore, the onus of proof always lies with the person alleging the cause of the accident.

Therefore, if there is a skid, one would have to prove that this was not caused through his or her own misconduct but that it was, in effect, an unexpected event. However, the driver should not only prove that the skid was as a result of a slippery road, but that the vehicle skidded without him or her being reckless and that all the necessary precautions expected from a prudent driver on a slippery road were taken. In fact, there were instances where the court found that the driver should not be held responsible for the accident as the main cause of such occurrence was the oil spill.

On the other hand, there were also instances where the defence of skidding presented by the driver did not hold. The courts found, for example, that the accident occurred as a result of reckless driving. In such instances, the driver was held responsible as he failed to drive prudently. Had he done so, he would have avoided the skid, or might have acted in a way that led to less severe damages resulting from the skid. Indeed, in a particular case, the court established that – even though the presence of oil was given as the possible cause of the skid – “the defendant should nevertheless have been able to negotiate the curve if traveling at an appropriate speed, and ruled in favour of the plaintiff”.

Therefore, the court may still find fault with a party (irrespective of the presence of oil) if the accident is caused as a result of over speeding, not maintaining the vehicle in a roadworthy condition (such as due to faulty tyres) or as a result of a contravention of traffic rules (such as over-taking on a double line). Hence, using oil spill as the reason for the occurrence of a particular accident may not always result in favour of the driver that is being held responsible for the accident.

In such instances, it is always important that any factors which may have led to the cause of the accident are noted in the warden or police report and are backed up with proper photographic evidence. It is fundamentally important that the driver uses his driving abilities to avoid any oil spill on the road especially if he notices other collisions in the vicinity or a vehicle dripping fuel/oil.

Most importantly, you should always act in utmost good faith when narrating facts and giving evidence of the circumstances of your case.

Theft of vehicle while unattended

What happens if my unattended vehicle is stolen with its keys inside? 

Insurance policy wording tends to be quite clear on this aspect, in the sense that loss or damage arising from theft whilst the ignition keys are in the car is excluded and not covered by the policy.

Such exclusion is applicable in the event the vehicle is unattended even if momentarily such as when the driver leaves the car switched on whilst withdrawing money from an ATM. In that brief period, a crafty thief could easily steal a vehicle. The insurer may subsequently reject the claim because of the exclusion mentioned above.

In addition, policies usually include a clause requiring policyholders to safeguard the vehicle from theft or damage at all times. Failure to take reasonable care may lead the insurer to reject a claim. However, to be fair and reasonable in rejecting a claim, the insurer must show that the policyholder was not only negligent but had also acted recklessly. This means that the driver acknowledged the risk yet still knowingly disregarded the consequences. A typical case scenario would be when a driver stops to withdraw cash from an ATM, parks on the other side of the road, he notices persons loitering around the area where he was parked but still leaves the windows of the car open and the keys in the ignition.

In reality, not all cases are straight forward. Some insurers may not take such a restrictive stance and thus may still decide to settle theft claims resulting from unattended vehicles. In addition, certain cases occur under particular circumstances and it is then up to the claims officer of the particular insurer to determine and decide whether the policyholder is covered or otherwise. As these cases may raise divergent points of interpretation, the parties may opt to go to arbitration or a court tribunal for the issue to be settled conclusively.

The vehicle was stored in a locked garage but the keys were left in the ignition. What will happen in case of theft of the vehicle?
Sometimes thefts of vehicles also occur when the ignition keys are inside and the car is locked in a garage. In the majority of cases, access to the car was gained by forcible and/or violent entry to the premises where the car was securely locked. Given the nature of such cases, there are a number of factors which could be taken into consideration when determining whether the insured had acted in a correct manner or was negligent. These factors include: the location of the garage, what deterrents existed and any mitigating factors that caused the driver to leave the keys in the vehicle.

Although the insured’s actions (leaving the keys in the vehicle) might be attributed to carelessness, it might not necessarily give rise to an element of outright negligence. The fact that there was forcible entry implies that the insured took reasonable precautions to protect the vehicle as is required by virtue of one of the main policy conditions referred to above. Thus, it cannot be considered that the insured was “reckless” if the garage door was correctly locked.

However, given the exclusion in the policy, it is always recommended that the vehicle and its ignition keys are never kept together; not even in a locked garage. Furthermore, it is of utmost importance that keys are never left in unsecured location such as with third parties (including parkers) and in easily accessible locations.

Lost keys

I have lost my car keys.  Can I recover the cost of new keys under my motor policy? Can I still claim for the theft of my vehicle?

Normally, every vehicle has two keys or key cards allowing access to the ignition of the vehicle. Some comprehensive and third-party fire and theft policies cover the cost of replacing lost keys or lock transmitters of a vehicle. Some policies may also cover the cost of re-programming the lock transmitter or its replacement provided that the total claim is not more than the applicable limit specified in the policy.

In the event of a vehicle theft claim, the insured would be required to present both keys to the insurer as part of the claim’s process. If the claimant is unable to present the two keys, the insurer may refuse to pay the claim especially if the vehicle can only be switched on with its unique programmed key and that it would be virtually impossible to do so otherwise. In such instances, it may result that the insured may have contributed to the loss through his gross negligence (that of not securing the two keys). In such cases, insurers must provide expert evidence illustrating just how difficult it was to start the ignition on that particular make and model of the vehicle without one of the original keys. The insured’s recklessness would also need to be proven.

Arbitration and Insurance

I have been involved in a car collision and the other party does not want to admit liability. Can the MFSA assist with determining who is at fault? 

In terms of law, a case involving collision may be referred to arbitration at the Malta Arbitration Centre.

Arbitration is a means of settling a dispute between two or more parties without resorting to the formalities of a court or a tribunal.

Generally speaking, there is voluntary and mandatory arbitration.

A contract of insurance, be it motor, travel, health or any type of insurance, may include what is usually known as an “arbitration clause”. Such clause would state that, in the event of a dispute between the policyholder and the insurance company, the matter would be referred to arbitration. For example, a policyholder may object to the interpretation by the insurance company of a particular insurance provision in the contract, or refutes to a decision by the company to honour a claim. The policyholder can refer the matter to arbitration. This is usually referred to as voluntary arbitration. The policyholder should therefore make sure that, before he can refer a dispute to arbitration, there is an arbitration clause in the contract of insurance. If such clause is absent, the policyholder, in agreement with the insurance company, may still agree to refer the matter to arbitration. Decisions from voluntary arbitrations are not made public and only the parties concerned would know of the final outcome.

Arbitration is mandatory in the event of (a) any collision between vehicles, or (b) any involuntary damage to property involving vehicles, or (c) any such claim against an authorised insurer who in accordance with the Motor Vehicles Insurance (Third-Party Risks) Ordinance (Cap. 104) or any policy of insurance may be liable therefor, and (d) the value whereof does not exceed €11,646.87. A dispute for damages for personal injuries cannot be referred to arbitration.

Therefore, two parties which are locked in a dispute as to who is at fault in a collision, where damages are less than €11,646.87 and none of the parties had been injured are required to refer their case to arbitration at the Malta Arbitration Centre. Decisions taken in respect of mandatory arbitration are public.

The arbitration award is final and binding and cannot be appealed, except for points of law. This means that the parties cannot refer the case to the courts for the merits of the case to be reassessed.

Many insurers can also offer parties what is usually referred to as informal arbitration. Such arrangement is not regulated by the Arbitration Act and parties might not have the same rights (e.g. appeal) as those enjoyed by parties who refer their case to the Malta Arbitration Centre.

More information is available from the Malta Arbitration Centre’s website

Failure to lodge a claim

If the other party fails to lodge a claim, what are my rights? 

In terms of the legislation, a party involved in an accident is obliged to inform his insurer of the accident within two weeks of the event or two weeks from the event first coming to the insured’s knowledge, if he was not present at the accident. Whenever an insurer believes that there are reasonable grounds that his client may be liable for the accident and therefore obliged to pay a claim to an injured party, the insurer is obliged to treat the event as if a claim has been made, whether the insured has notified the accident or not.

If the insurer is of the opinion that liability is to be admitted, whether in full or in part, then the insured must be notified of the intention to pay the claim and the proposed settlement amount. The notification should also include an explanation of the consequences the insured might be liable to if he objects to the payment. An insurer is entitled to recover legal costs and interest from the insured who had objected to the payment.

Insurers have recognised that many of their clients are at best intransigent and fail to file a claim or even to respond to requests to file a claim. This is not acceptable and insurers are obliged to ensure that the word and spirit of the law are respected. Insurers are legally obliged to send these notifications in writing and by registered mail. These notifications should be sent without delay following the lapse of the statutory two weeks notification period from the date of the event/accident, or when the third party notifies the insurer, whichever is the earlier. A policyholder who receives a notification is understood to have agreed to the payment of the claim unless, within ten days of receipt of the notice, he informs the insurer of his objection to the payment.

If a customer objects, the insurer is duty bound to inform the third party of his customer’s objection. In this case, the third party would be entitled to challenge the objection through litigation (generally through arbitration if the value of the claim does not exceed €11,640 and no persons had been injured).

Life Insurance

In 1988, I took out a loan with one of the local banks. I was required to issue a life insurance policy and, between the various options available, I took out an endowment policy. I was led to believe that the policy would be paying me a rather handsome sum of money upon maturity in 20 years time. However, at no point, during the purchase of the policy, it was mentioned (verbally or in writing) that the maturity value can be less than that declared. I happened to be reading an article which stated that insurance policies may not pay up the declared maturity value and, upon enquiring with my insurance company, I was told that the maturity value of the policy may vary as this depends on profits made. I was told that the documentation I had been provided at the time did not state that values are guaranteed but, rather, that the values were being quoted as estimates. I believe this is deceiving and constitutes a breach of my rights because I was forced into buying a product which is not likely to deliver on its promises. What are my rights? 

Many policyholders questioned the resilience of their life insurance companies in the wake of the financial turmoil that left many investors worldwide uncertain of the future.

It is pertinent to point out that regulation and consumer protection regulations have evolved since 1988 and this is reflected in the quality of the documentation which is available today, as compared to 20 years ago. This does not mean that the documentation used at the time was deceiving or incomplete – one would say that there might not have been as much detailed disclosure as there is today. For sure, the type of illustrations which were given at the time of sale might have been reflective of the typical returns rewarded by life insurance policies at the time. One cannot deny the fact that these same returns now appear to be ‘historic’ due to unsettled economic times. The policy wording would not normally express any guarantee with respect to the value at maturity. The policy quotations, which would normally serve as basis to proceed with a policy, would have indicated the potential returns likely to be achieved over its lifetime. The terms normally used on the quotation would be “estimated maturity value(s)” which cannot be taken as guaranteed amounts.

It is a fact that bonus rates (mostly relevant to endowment policies) are dictated by financial conditions at the time in which they are declared. Depending on the insurer, quotations may show three indicative bonus rates, such as 3%, 5% and 7%. Although the last two scenarios may sound very generous by today’s rates, they might have been realistic at the time.

In respect of the penalties applicable if policyholders cash in their policy prior to maturity date, it is pertinent to point out that a life policy is a long term insurance contract and therefore will penalize those considering an early release. A policy can increase in value if declared bonuses remain buoyant or improve. However, declared bonuses might also be less than those in previous years – which is a major cause of concern for many policyholders. For this reason, it is premature to complain of bonus returns at this stage.

Finally, one must also keep in mind that, during this time, the policy was also giving the complainant life protection. This means that had the complainant died after payment of the first premium given the policy was not pledged in favour of the bank, his/her family would have been paid the value of the sum assured. This means that one’s death would not have left a financial burden on the family following payment of the sum assured, this aspect is most often misunderstood or forgotten by policyholders.

I plan to obtain a loan facility from a bank and I had been asked to purchase a life assurance policy. Do I have to purchase that policy from the bank, if it offers it to me?

In Malta some banks are tied intermediaries of insurance companies and are therefore able to promote and sell life insurance policies of that company. Although banks may provide you with brochures on life policies which they promote, you are entitled to shop around for other policies issued by other insurance companies as long as they meet the bank’s requirement. Ask your bank to provide you with details of their requirements. Banks cannot require you to purchase only products which they are promoting and you should feel free to refuse any offer from the bank in this respect,

Protection for my Life Assurance

Question: I started a life assurance policy around five years ago which will mature within fifteen years. If my insurance company had to default, will my policy be protected? Is there a scheme in Malta, similar to the Depositor Compensation Scheme, which protects me for such eventuality? 

The Insurance Business Act provides the legal framework for the regulation and supervision of insurance companies. In order for a company to be authorised and continue to be authorised it must satisfy certain requirements. One of the requirements is that the insurer must maintain adequate assets to cover the liabilities (including policyholder’s claims) arising out of the business of insurance. Assets must be unencumbered and admissible in accordance with Regulations issued under the Act. In so far as life assurance companies are concerned they are required to provide an actuarial report drawn up by an independent actuary confirming that the reserves maintained by the company are adequate to meet its liabilities.

Should an insurance company run into financial difficulties individual policyholders have the right to make a claim under the Protection & Compensation Fund Regulations for the amount remaining unpaid (subject to limits mentioned below) after all the assets of the company have been exhausted. The said Regulations exclude policyholders of unit linked policies from the right of to be compensated under the said Fund.

Legal Notice 435 of 2003, which establishes the Protection and Compensation Fund (“the Fund”) in terms of the Insurance Business Act, intervenes in situations of:

  • A hit and run accident – The Fund compensates road traffic victims who suffer dead or a bodily injury from an accident where the person and vehicle causing the injury are unknown.
  • Uninsured drivers – The Fund compensates victims who suffer any liability which may be incurred in respect of the death of, or bodily injury to, any person or in respect of any loss of, or damage to, any property of any person which is required to be covered by a policy of insurance under the Motor Vehicle Insurance (Third-Party Risks) Ordinance (Chapter 104 of the Laws of Malta).
  • Insolvency of a licensed insurer – In the event that a licensed insurer is declared insolvent and is unable to meet its obligations, the Fund covers obligations arising from a claim under a policy of insurance covering a risk situated in Malta. Payment shall also be made out of the fund if the insolvent insurer is at the time when it is unable to meet its obligations, servicing or running-off the business of insurance it was licensed to carry on under the Insurance Act. These payments are subject to certain exclusions and conditions.

If a claim is legally required to be covered by compulsory insurance, such as third party injuries from motor accidents, then that claim shall be paid in full. Other claims are limited to 75% of any one loss or €23,293.73, whichever is the less. This amount may not be absolute because there is also a limit as to how much the Fund can pay in respect of a default of one life assurance firm. So the amount may have to be equally distributed between policyholders. The mechanism as to when compensation is triggered can take some years after an insurance company is declared in default because payment of claims can only be made after a court determines that the life assurance company is definitely wound up and/or has been struck of the register of companies authorised to provide life assurance business in Malta.

The Provision of the Policy Conditions

(1) On-line shopping is so convenient, even when renewing my insurance policy. When I purchase an insurance policy online, is the insurance company obliged to send me the policy documentation and other related documents by mail? 

It stands to reason, that a policyholder should be provided not only with the benefits which the insurance policy may award in the event of a claim, but also the contractual terms binding on both the insurer and the insured, i.e. the policy document. At inception, the insurance policy would generally be provided to the policyholder. There is no obligation for the insurer to provide the same contract to the insured if the policy is renewed with the same insurer – however, the insurer may amend any policy conditions prior to renewal by means of an endorsement, which is usually attached to the renewal notice.

(2) I will be joining a tour next August and I preferred to purchase my travel insurance from my travel agent. Actually, I was told that the whole group will be insured under one policy. I was given a receipt for the premium and also a document which lists the benefits from the policy if I claim. Is that all the insurance documentation I need?

There may be some instances in which the policy document may not be given – not because the insurer is not willing to do so but rather as a result of the contractual nature between the insurer, the insured and the beneficiaries of the policy. This may usually occur when the policy is issued to a group of people, such as a group health scheme or a group travel policy. In the former case, for example, the contracting party is normally the organization which pays for the policy and the beneficiaries of the policy are the staff of such organization. The contract between the insurer and the insured (i.e. the organisation) may not only contain the “standard terms and conditions” of a health insurance policy but also other contractual clauses of a commercial nature which may not necessarily be of interest to the beneficiaries. Given the commercial nature of the transaction, it may not be appropriate for the organisation’s staff to have access to the whole document. However, the organisation in question is expected to provide the product information document relating to the insurance policy to all the insureds.

In any case, the insurance intermediary distributing the insurance product whether this relates to general insurance or whether the product in question is an insurance based investment products (e.g. unit linked policies), is obliged to provide to the client a Product Information Document.  This is essentially a very brief document containing standardised information about the policy’s basic features such as the name of the insurance company issuing the policy, cover, exclusions, cancellation rights and restriction of cover. This document can be sent by email or can be made available from download from the website of the insurer or of the insurance intermediary distributing the insurance product.

The Conduct of Business Rulebook which applies to insurers and insurance intermediaries distributing insurance products requires these entities to provide certain information to clients in a paper or any other durable medium which is defined as“ any instrument which enables a client to store information addressed personally to that client in a way accessible for future reference and for a period of time adequate for the purposes of the Information  and which allows the unchanged reproduction of the information stored.”

Travel Insurance

Question: I was on holiday with my family and on our outbound journey, we had to take a connecting flight. On reaching our final destination, we were informed that as our connection was tight, our luggage did not make it on the connecting flight. You can imagine the inconvenience this has caused us. To add insult to injury, we were informed that the next flight was the following day (in around 9 hours). So we went for a shopping spree, and kept the receipts for claim purposes. To our chagrin, the insurance company did not even accept our claim, despite the fact that they acknowledged the inconvenience of being deprived of our belonging at the very start of our holiday. Is this fair? 

Answer: An insurer is obliged to compensate you for any loss you incur in the event that your luggage is temporarily lost in transit on the outward journey and not restored to you within a specific time period.

Some insurers may apply a full 12 hours to make it eligible for you to claim compensation for emergency items. Indeed, the consumer should be aware of the conditions of the policy for such situations. Typically, a travel insurance policy would pay for the emergency purchase of essential replacement items up to a maximum limit. The claimant should present receipts for such emergency items and also obtain written confirmation from the airline of the number of hours delay. It may also be helpful to keep any receipts provided by the carrier indicating that when the luggage had been delivered. When the traveller signs the form (usually in duplicate), it may be useful to take note of the date and time the luggage had been handed to the traveller (if left at reception, the reception might be asked to confirm this). That, too, is also proof as to the time luggage has arrived.
Had the complainant’s luggage been permanently lost, the policy would have covered the overall baggage sum insured, depending on the type of policy.

It is always advisable to take a copy of the insurance policy with you and refer to it in similar situations. Policy conditions are often quite specific. The fact that your luggage returned after 10 hours may not be sufficient to give you eligibility to claim from your insurance. Moreover, there may be situations where the insurers would consider giving an ex-gratia payment where there is evidence of inconvenience resulting from the delay. However, going for a shopping spree would not usually convince an insurer of one’s good faith – after all, the policy covers you for emergency items.

Question: I was on holiday in Greece last summer and my handbag was stolen while swimming. In my handbag I had a mobile phone, a digital camera, around €500 cash and prescription sunglasses. I made a police report and on my return to Malta, I lodged a claim with my insurer. However, the insurance company refused to honour my claim, which I think is unfair. 

As the adage goes, always act prudently – as if you are not insured! This means that one should always take care of his property irrespective of any insurance cover you might have. Many travel policies include a provision which excludes payment for loss of or damage to or theft of personal belongings if left unattended. For example, some insurance policies may also recommend that you should lock your valuables in a safe while you are not around.

It is evident that you did not exercise reasonable care when you left your handbag unattended while swimming. This circumstance was excluded under your travel policy and it is on this basis that your claim was not upheld.