An insurance company's refusal to pay for an Auckland woman's stolen goods has sparked warnings your cover may not be all that it seems.
Kelly Manning has been making jewellery as a hobby for years, selling it once or twice a month at local markets and gifting it to friends.
But earlier this month, her car was broken into while parked outside Southern Cross Hospital on the North Shore and more than $8000 worth of products were stolen – including the display stands she sets her jewellery on.
"Everything got taken, including a package that I was about to post off to a Wellington store that was going to sell on my behalf," she says.
Ms Manning, who has been insured with State since the 1990s, lodged a claim under her contents insurance policy.
Initially she was told the claim would be accepted, but after consideration from senior supervisors at State, was told the jewellery would not be covered because it was part of a business.
"I thought, it's not a business because I only sell it like at markets," says Ms Manning.
But a spokesperson for State, a brand of IAG who also owns AMI Insurance, says customers are not covered for contents used at any time to earn money – no matter how large or small.
"For example, if an estate agent lost her camera that she used 90 percent of the time to take family photos and 10 percent of the time to take photos of houses for sale, IAG brands in general would decline the claim on the basis that the camera was clearly used a particular times for earning income."
However the spokesperson admits there is sometimes confusion from its customers whose hobbies might sometimes earn money, like Ms Manning's jewellery making.
"Uncertainty tends to arise when earnings are made from hobbies – such as gigging – rather than from their full time job, or a side business, especially if is not profitable."
AA Insurance has a similar policy, where contents used for earning any income – no matter the amount – will not be covered under personal insurance.
"This means that once a customer earns an income from their hobby, no matter the amount, has stock that is intended to generate income, and has equipment specifically for making that saleable item/service, it is deemed a business," says customer relations manager Amelia Macandrew.
However, AA Insurance differs from IAG where it acknowledges some customers may have hobbies that earn income from time-to-time.
"With this in mind our policy will cover a claim for business tools or professional equipment up to a fixed event limit of $1000," says Ms Macandrew.
But even if Ms Manning was insured with AA, she wouldn't be covered in this case because the company won't accept a claim if the contents have been "removed for exhibition or sale".
"Understandably, there is more risk of loss or damage to an item if it has been moved away from the home in order to be sold, such as a market or other retail environment," says Ms Macandrew.
Tower Insurance, on the other hand, says it would likely cover Ms Manning had she been insured with them.
"We provide flexibility for our customers by including varying amounts of cover for business tools in our domestic contents policies," a spokesperson said.
But the company would not be able to cover the loss of Ms Manning's jewellery already made – just the tools used to make it.
Tower recommends people insure items used to make any income, under a business policy.
The news is of little comfort to Ms Manning, who used the profits made from her jewellery making as pocket money for her family.
"I'm really bummed," she says. "Even if it was just sort of a small amount, because now I can't afford to buy back any of the crystals or sterling silver or pearls or anything like that to make up any new stock.
"I've had to email my family [and tell them] look, we can't afford Christmas presents this year, there's just no extra money now for it."
Ms Manning says not knowing she was required to insure the jewellery for business contents is "frustrating".
"It's eye-opening and it's just really frustrating… not just the financial side of it, but because I've put hours and hours of work into all that material."
Ms Manning says her recent experience has been stressful and has prompted her to look for a new insurance company.
3 News
source: newshub archive
