A policyholder who had her 22-carat gold belt stolen during a burglary has lost her challenge to increase her insurer’s payout after it limited its liability to $25,000. 

The complainant lodged the claim following a break-in during which thieves stole the belt and other items. Chubb accepted the claim and agreed to cash settle to cover losses. 

However, a dispute arose over the amount the insurer awarded for the belt after it offered a settlement of $25,000, the maximum amount for jewellery items under the home and contents policy. 

The claimant says the “ceremonial waist belt” was not an item of jewellery and should not be subject to the limit. She argues that the item was designed as a clothing accessory, noting that she had previously worn it for select social events. 

The insured said Chubb should pay its replacement value of $154,000. 

The policy wording relating to “jewellery”, which had been placed as a sub-category under “contents”, identified it as “articles of personal adornment containing gemstones, silver, gold, platinum or other precious metals or alloys”. 

The Australian Financial Complaints Authority (AFCA) panel acknowledged the policy did not define the term “adornment”, and AFCA instead relied on the Macquarie Dictionary’s definition of the word, which notes a purpose "to increase or lend beauty to, as by dress or ornaments, decorate”. 

The panel says that based on the applied definition and the policy wording, the insurer’s assessment of the belt as an item of jewellery was fair. 

“Having regard to the available evidence (particularly the belt’s material, description and the complainant’s statement regarding its purpose and use), the panel is satisfied the belt, made of precious metal, was a decorative accessory/item of personal adornment,” AFCA said.

AFCA considered the complainant’s contention that the belt was utilised for purposes beyond being “purely decorative” but says this was not applicable given the item’s quality.

“However, just because an item may serve a practical purpose (as might a hair pin or tie pin), does not mean it is not also an item of personal adornment,” AFCA said.

“That is particularly so when it is made of gold, has significant inherent value and beauty, is individually crafted and is intended to be on display (on special occasions only), which the panel is satisfied is the case with the stolen belt.”

The ruling also rebuffed the insured’s appeal to have the belt considered an “item of precious metals”, which carried a maximum liability limit of $100,000, saying that this sub-category related to household items and expressly excluded jewellery items.

Click here for the ruling.