Case Review: Insurance
Summary of some of the decisions made by the Mediators on some of the complaints received by FMB.
This summary is for information only and should not be used for other purpose.
FMB/GI 0334 - Theft of Parts of Motorcycle
The insured submitted a claim for the loss of the engine of the insured motorcycle. The insurers declined the claim on the ground of the following policy exclusion:-
"The company shall not be liable to pay for
(iii) loss of or damage to accessories or spare parts by burglary house breaking or theft unless the motor vehicle is stolen at the same time"
It is obvious that the item stolen is not an accessory or a spare part of the insured vehicle. It is an integral part of the motorcycle. The exclusion clause only excludes liability for loss of "accessories or spare parts".
It also pertinent to refer to the following provision in the policy:-
"2. At its option the company may pay in cash the amount of the loss or damage or may repair reinstate or replace the motor vehicle or any part thereof or its accessories or spare parts. The liability of the company shall not exceed the value of the parts lost or damaged and the reasonable cost of fitting such parts"
While the policy specifically excludes loss of accessories or spare parts, there is nothing in the exclusion clause which excludes loss of any part of the motorcycle. Based on the provision of the policy the insurers are liable to indemnify the loss of the motor vehicle or any part thereof. Accordingly the Mediator held the insurers liable to settle the insured's claim for the loss of the engine of the insured motorcycle.