Break-In Claim

The following is a case study published in OFS Annual report:

Madam Jasmine and her husband who live in Johor had purchased a property in Langkawi for investment purposes. They occasionally visited the property. There was a break-in incident to the participants’ property and items were stolen or damaged. A claim was made and the takaful operator repudiated the claim on the basis that theft coverage is excluded if the covered property is left unoccupied for more than 90 days.

Our Findings
The takaful coverage was purchased through an agent in Johor who was aware that the covered property is located in Langkawi, and
it was purchased for investment purposes. The agent was also aware that Madam Jasmine is based in Johor while her husband worked
overseas. Despite this, the agent did not inform the participants of other suitable options such as the ‘unoccupancy in excess of 90 days’ coverage which was available with payment of additional contribution.

There was also no specific question in the proposal form with regards to whether the property covered will be occupied. Further, there
was no indication in the proposal form to alert the participants of the ‘theft coverage’ conditions whereby a theft claim will not be payable if the house is left unoccupied for more than 90 days.

The takaful operator confirmed that they were aware that Madam Jasmine’s husband works abroad. However, the takaful operator did
not advise the participants that coverage for ‘unoccupancy in excess of 90 days’ was available with payment of additional contribution.

Madam Jasmine and husband claimed that they were never provided the full takaful contract wordings which stated the limitations linked to the ‘theft peril’. The only documents provided to them were the takaful quotation, schedule, and invoice. Hence, they were unaware of
the condition that the property should not be unoccupied for more than 90 days until after the rejection of their claim.

After the case manager highlighted that the participants were only informed of the condition for unoccupied property after the rejection of
their claim, the takaful operator reviewed their decision and settled the participants’ claim.