A jet ski owner has won a claim dispute after it was stolen in March from behind a locked garage door at his residence in a quiet court while he was away from his home for a night.

The carport where the jet ski was stored was open to his rear garden, though perimeter fencing and a locked roller door protected the jet ski – along with a trailer which was also stolen - and blocked all view of the watercraft from the street.

After returning home on a Sunday in late March and realising the jet ski and trailer were stolen, he notified the police and lodged a claim under a pleasure craft policy held with Club Marine.

The insurer declined the claim, saying he failed to take reasonable precautions to secure the water craft from theft, there was no evidence of forced entry and the vessel was not fitted with anti-theft devices. He should have locked the jet ski and trailer to a fixed object or used an anti-theft device, it said.

The owner said the only way anyone could gain access to his backyard was by scaling the boundary fences, and if they were “brazen enough” to break into his property in a quiet court, a chain or lock would not have deterred them. He said as the jet ski was stored in a locked yard behind a locked garage door, it satisfied the policy terms and it was not required to be secured to a fixed object or linked to an anti-theft device.

The policy stipulated personal water craft should be stored in a locked garage or yard when not in use, and any available alarms, surveillance systems or other security measures should be activated. Where left unattended in the open air or stored on a trailer, the trailer should be secured to a fixed object using a combination of chains and locks, or applying a wheel locking device, the policy said.

In an email on April 7, Club Marine said “there is no dispute that your PWC (personal water craft) was stored in a locked yard”.

The Australian Financial Complaints Authority (AFCA) ruled Club Marine had not established any policy provision applied to allow it to avoid liability, or that the complainant deliberately or recklessly courted the theft or failed to take “reasonable precautions” – a stated requirement under the policy.

“I accept the complainant believed he met the policy requirements by storing the jet ski in a locked yard, and this did not require any further security measures if they were not available,” AFCA said.

The absence of evidence of forced entry to the garage door or property did “not assist” Club Marine, AFCA said, as its policy said “some cases” would require evidence that locks or locked doors have been forced or chains cut, but it was “not clear what cases may require this evidence, and it is not presented in a way that clearly informs the complainant it is a condition of cover for theft”.

The policy terms excluded cover “where you have failed to take reasonable precautions against theft to safeguard and secure it when unattended”.

AFCA explored in detail application of “reasonable precaution” exclusion clauses.

It found this did not apply “solely because the complainant failed to take the above security measures” and said it had been well established in the courts that to apply “reasonable precautions”, the insurer must show the complainant recognised a danger or risk and deliberately courted the danger by taking measures which he knew were inadequate to avert it, or showed reckless indifference as to whether the danger eventuated.

“Failing to act, or acting negligently or carelessly, will not be enough on its own. It is the complainant’s actual understanding of the risk that is relevant,” AFCA said.

“If the insurer intended to exclude cover in every instance a theft occurred when the jet ski is left unattended and not secured to a fixed object, or without an anti-theft device, the insurer could have included this without reference to a failure to take reasonable precautions. It did not,” AFCA said.

Examples included in Club Marine’s policy of what it considered reasonable precautions to prevent or minimise theft did “not mean the policy clause departs from the accepted principles outlined in the courts,” AFCA said, and it would not be fair for Club Marine to rely on the clause “given its well settled meaning”.

“Given the insurer has not established the exclusion, or that it can reasonably depart from the accepted legal principles regarding the interpretation of reasonable precautions clauses, it is fair in all the circumstances that the insurer accepts the claim,” AFCA said.

See the full ruling here.