A property owner who failed to read the fine print of his insurance policy has been denied BD12,000 in compensation after his luxury villa was burgled.
The claim was rejected because the villa had been left unoccupied for more than 30 days, triggering a policy clause that voids coverage if a property remains uninhabited for a month.
The plaintiff argued that he had been ‘deceived’ by the insurance provider, claiming the relevant clause was printed in a font ‘that was too small’. He took the matter to court seeking compensation.
A Civil Court initially ruled in his favour, finding that the forfeiture clause had effectively been ‘slipped into the policy’s fine print’, and ordered the insurer to pay the full amount plus interest.
However, the insurer – the defendant – appealed the verdict at the Supreme Civil Appeals Court and the ruling was overturned.
The man challenged the verdict before the Cassation Court, which rejected his appeal in a final judgment, leaving him without compensation.
The court heard that the plaintiff had insured the villa against theft, vandalism and third-party liability, and had continued making mortgage payments on the property. He was, however, overseas when the break-in occurred.
Thieves stole valuables and caused extensive damage, including cutting electrical cables, breaking locks and damaging chandeliers.
Police later arrested suspects in connection with the incident, with one individual subsequently convicted of burglary.
After the claim was denied, the property owner challenged the insurer’s decision before the High Civil Court.
Judges initially ruled that the claim should not have been rejected, finding that the exclusion clause had effectively been buried in the policy’s fine print and was not sufficiently brought to the policyholder’s attention. The court noted that the provision appeared in the same font, colour and size as the rest of the terms and conditions.
Judges held that, had the clause been presented more prominently, such as through larger print or clearer placement within the policy booklet, it could have validly resulted in the forfeiture of coverage. On that basis, they concluded that the insurer could not rely on the clause to deny the claim.
“A regular reader would be unable to distinguish the forfeiture clause from the rest of the text in the booklet,” the ruling read.
The plaintiff initially succeeded in his claim, with the court ordering the insurer to pay the full compensation amount, together with interest, and to cover the legal costs.
However, the insurance company appealed the ruling before the Supreme Civil Appeals Court, relying on electricity bills that showed almost no consumption at the property for several months before the burglary.
A representative of the defendant argued that the bills were sufficient to declare the policy void since they proved that the villa had been unoccupied for more than 30 consecutive days.
“A forfeiture clause is not a strange or unusual condition to have in property insurance,” the lawyers argued.
The court also heard that police reports described the villa as appearing deserted and uninhabited at the time of the incident. Based on this evidence, the appellate court overturned the lower court’s ruling.
The owner subsequently appealed to Bahrain’s highest court – again arguing that the clause had not been clearly presented in the policy document.
The Cassation Court, however, responded that the grounds raised did not fall within its scope of review and dismissed the appeal.
zainab@gdnmedia.bh
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