One flat, one burglary, two very different policies

TWO MEN shared a flat which was burgled. Both lost possessions worth pounds 2,500 and claimed on their separate policies. One - Royal Insurance - paid out in full, while the other - Sun Alliance - turned down the claim.

Price-wise, the two contents policies hardly differed - pounds 17 a month for Sun Alliance against pounds 20 for Royal.

But the Sun Alliance policy had a glaring exclusion. The terms and conditions stated that cover was only offered if the front door was secured with a mortise deadlock.

On the day in question the deadlock was left unturned at the third-floor flat in South Kensington, London. Burglers got away with a signet ring, cuff links, a watch, a Walkman, a camera, silver picture frames, and five pairs of expensive shoes.

Jonathan Hull, an estate agent, whose claim was rejected, feels bitter. 'Part of the reason we get insured is because we're human and can be forgetful or absent-minded,' he said.

'I made an honest mistake by leaving the deadlock off but I still feel I should be covered. If the place was done up to resemble Fort Knox, I wouldn't need insurance.'

James Deen, who works for James Capel, the stockbrokers, sympathises with his flatmate. 'Sun Alliance has loaded on the exclusions and the policy is hardly any cheaper.

'This is a very harsh decision and makes you wonder why anyone would want a Sun Alliance policy.'

The first three months of this year saw a record rise in the cost of theft from homes.

It was up 65 per cent on the previous quarter at pounds 214m - or pounds 2m a day.

Mike Jones, chief executive of the Association of British Insurers, said: 'No improvement can be expected until householders take the simple precautions urged by insurers and the police to protect their homes and so make things more difficult for the thief.'

These precautions, such as deadlocks and window locks, are now written into policies in certain areas deemed to be high risk.

But, as an area is only tagged 'high risk' if there have been a lot of claims, insurers differ in their assessments. They are split down the middle in their reading of South Kensington.

Legal & General and Commercial Union both say the area is prone to burglary and insist on deadlocks.

Based on their claims experience, Guardian Royal Exchange and Norwich Union put South Kensington in a lower risk bracket and do not write in the exclusions.

Barbara Hollis, manager of Hanover Insurance Brokers, based in South Kensington, said brokers should not be offering their clients policies peppered with exclusions.

'Insurance companies are obviously very hot on protecting themselves by whatever means.

'In my experience this means looking at the small print and trying to wriggle out.

'We specialise in high-risk clients and take it for granted they will be doing everything they can to protect their property.

'But if they slip up one day their policy should still stand.'

She cites the case of a woman who dashed out of the house when her child was rushed to hospital. She locked the door but forgot to put on the burglar alarm. Thieves struck and the insurance company refused to pay out.

Clive Longhurst, for the ABI, said insurance companies can exclude what they like.

'They can exclude you if your eyes are blue and blue-eyed people are stupid if they go for that cover.

'Unfortunately, people spend more time looking at the contents of a Mars Bar than at their policy.

'Then they get upset when they realise they've bought the wrong thing.'

The insurance ombudsman has ruled that all exclusions must be set out fairly and must satisfy the test of 'reasonableness'.

'To take an extreme example it might be considered unreasonable to expect someone to walk around with a bunch of keys at their waist doing up all the locks in their house,' a spokesman said.

(Photograph omitted)