Private Christmas parties pose home contents insurance risk, finds Chubb

Many home insurance policies do not cover events at private parties, Chubb Insurance has found.

12:40 23 December 2004

Many home insurance policies do not cover events at private parties, Chubb Insurance has found.

With hundreds of thousands of private parties planned across the UK for Christmas and New Year, Chubb Insurance is warning homeowners to check the small print of their policies before they open their doors to guests.

The special circumstances that a party brings about mean that insurance might not pay out if, for example, a guest opens the door to thieves or items go missing during the course of the evening.

If invited guests damage or steal property there might be problems again, as insurance policies often have caveats including "reasonable care", "mysterious disappearance" or a "security warranty" which might mean providers do not pay out.

"Mysterious disappearance" is a common exclusion that places the onus on the policyholder to prove that an item has actually been stolen and to be able to demonstrate when. Any vagueness or lack of proof may mean a claim is not paid, explained Chubb.

The "reasonable care" condition is relevant as if a bogus guest enters the party with intending to steal items an insurer may not pay any resulting claim due to, what they may feel, is lack of care on the policyholder's part if a guest has opened the door. It is the insurer's interpretation of "reasonable care", not the insured's, which determines whether a claim is paid out on.

John Sims, Chubb's personal lines manager for Europe, explained: "Insurers may differ in their opinion depending on the scenario. As previously mentioned, if the burglars were let into the home by another guest, or even walked in through an open front door, many insurers would argue that the insured has not exercised 'reasonable care' and as a result not pay any claim.

"There can also be more serious repercussions. Recently there has been an increase in aggravated burglaries. With an exclusive guest list, burglars may consider threatening guests with violence in order to steal attractive jewellery and watches, not just from the host, but from his/her guests."

A "security warranty" is when an insurer imposes a condition at the start of the insurance stating that jewellery, for instance, should be stored in a safe when not worn.

Mr Sims added that some policies would exclude the loss of a private wine collection raided by guests if guests enjoyed the contents of the cellar by drinking them.