In the January issue of ombudsman news, we set out our general position regarding claims where cars have been stolen when the keys were left in or on them. We noted that at least one case (Hayward v Norwich Union) was being considered by the courts and might provide us with further guidance on our stance.
Following the Court of Appeal decision in Hayward v Norwich Union (February 2001, unreported, The Times Law Reports, 8 March 2001), we have reviewed the position. We concluded that we do not need to adjust our approach materially as a result of this judgment. Lord Justice Peter Gibson decided that the policy exclusion where the "keys of your car have been left in or on the car" meant that the person leaving the keys had caused them to remain in the car, or allowed them to remain there, and had moved away from the keys.
A review of the cases we summarised in our January issue shows that applying this test would produce the same results for those cases. In case 1/06, we would not regard someone who leaves the engine running while he opens his garage door as having moved away from the car. The conclusion in case 1/07, by contrast, was reached because the policyholder had not been made aware of the exclusion. She had clearly moved away from the car when she went into the filling station kiosk to pay.
The test of "going away" from a car cannot be precisely formulated. It must be judged in a common sense way on the basis of the individual circumstances of each case. The fact that a theft occurred is not sufficient to demonstrate that the policyholder was not close enough to make a theft unlikely. The relevant consideration here is whether the degree of proximity made the prevention of the theft likely, not whether it made the theft impossible (or indeed whether theft was, of itself, likely).
In practice we can do no better than consider whether the policyholder:
An important factor in assessing the degree of proximity required will be the nature of the location. The responsible person needs to be nearer to a car left in a busy street (or petrol forecourt) than to a car left in the middle of an empty field.
This exclusion is now reasonably commonplace, but nonetheless comes as an unpleasant surprise to most policyholders. They will often have expected the insurer to meet claims for theft arising from some carelessness on their part, in just the same way as they expect it to meet a claim for a road traffic accident. We expect insurers to word exclusion clauses clearly in their policies and to highlight them for the policyholder. Where they fail to do this, we are unlikely to agree that they are entitled to reject the claim.
ombudsman news gives general information on the position at the date of publication. It is not a definitive statement of the law, our approach or our procedure.
The illustrative case studies are based broadly on real-life cases, but are not precedents. Individual cases are decided on their own facts.