November 29, 2013

Horse 1572 - "Reasonable Care" or "Don't Lock Your Doors When You Go Out"

By now you've probably seen the NRMA adverts with the guitar player who continues to play on when people's houses and shops are burning, when people are fixing broken things because of accident and where he sits on the bonnet of someone's car.

In the latest installment of these adverts, we read this about Home & Contents Insurance:

"You're covered, even if you forget to lock your door." Really? I'm confused. Immedieately below this, IN THE SAME ADVERT, we find the following caveat:

Let me reread that: "You must take reasonable care to secure your home and contents". Take note of two words in that sentence - reasonable care.

I take note of the definition of reasonable care in Black's Law Dictionary 9th ed (2009):
reasonable care n. the degree of caution and concern for the safety of himself/herself and others an ordinarily prudent and rational person would use in the circumstances. This is a subjective test of determining if a person is negligent, meaning he/she did not exercise reasonable care.

I do realise that people will forget to lock their door but for the purposes on an insurance test, forgetting to lock their door might be seen as an act of negligence, which would prove that reasonable care was not exercised. It is quite reasonable to assume that an ordinarily prudent and rational person would lock their door.
If this is indeed the case, wouldn't an insurance claim be rendered null and void?

I think that this is particular mentioning since the NRMA's very own Product Disclosure Statement  on page 53 says that:
We don't cover loss, damage, injury or death arising from:
you not taking reasonable care to protect your home or contents against loss or damage.

It also points out on page 78 that:
Home is any enclosed building at your site that has walls and a roof and can be locked up which 
you use mainly for domestic purposes.

On my simple and ordinary reading of their PDS, I think that I've come to the conclusion that the NRMA are indulging in a spot of misleading advertising. Just quietly, I think that Fair Trading NSW should look into this.

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