A traveller who lodged a claim for lost luggage after leaving a bag on a plane has won his dispute after the Australian Financial Complaints Authority (AFCA) ruled that his insurer could not apply an exclusion. 

The complainant filed the claim after he left a shoulder bag containing valuable personal materials in the aircraft’s overhead compartment.

After realising the bag was missing, the complainant reported the loss to the airline but was not allowed to return to the aircraft to look for it. The bag was never found. 

Mitsui Sumitomo Insurance declined the claim, saying that the claimant left the item unattended in a public place without taking “reasonable precautions to prevent the loss”. 

The complainant says the insurer “enticed” him to purchase the policy by relying on misleading information that suggested any loss of luggage would be covered. AFCA rejected this argument, saying the insurer clearly defined circumstances for exclusions in the policy’s Product Disclosure Statement. 

AFCA agreed with the insurer’s assessment that the insured left the bag unattended but questioned whether the claimant had failed to take “reasonable precautions”. 

It says established court precedent identifies a failure to take “reasonable precautions” to mean that the person had been aware and “courted” the danger of a potential loss by failing to take measures to avoid it. 

The ruling says the claimant exited the plane without realising that he had left the bag on the aircraft. It says under these circumstances, it couldn’t be proven that he had failed to take the appropriate precautions as he was unaware of the potential for loss. 

“Considering the circumstances surrounding the complainant’s loss, the evidence shows he disembarked the aircraft not realising he was leaving the shoulder bag with personal effects in the overhead cabin luggage compartment,” AFCA said.

“It is therefore safe to say the complainant would not have been aware of the potential danger of a loss.

“It is not necessary to assess if he courted the danger, as he was not aware of the potential danger of a loss in the first place.

“One cannot say the complainant did not act in a reasonable way and did not look after the property as he accidentally exited the aircraft without realising he was leaving the shoulder bag behind in the aircraft.”

The ruling required Mitsui Sumitomo Insurance to accept the claim and award the traveller $250 for non-financial loss compensation relating to its handling.

AFCA said the insurer’s failure to respond to the complainant’s calls caused inconvenience and unnecessary stress to the man, who had been in a compromised financial state. 

Click here for the ruling.