The complaints authority has told a policyholder to allow expert inspections of damaged musical instruments after it accepted her insurer had insufficient information to make a claim decision.  

Last year, the claimant said a repairer had damaged two flutes, a piccolo and their cases during servicing. 

The instruments were “high-end professional models” and needed to be returned to the manufacturer in the US for repairs, she said.

Lloyd’s Australia requested that the claimant provide a formal damage report or allow an inspection for an “adequate and insightful assessment of the damage, its cause, and the cost of repair”.

But the owner refused to provide the instruments, raising concerns they could be further damaged by someone unqualified to take them apart.

She said most repairers in Australia lacked the necessary expertise and the items should be returned to the manufacturer.

In a dispute ruling, the Australian Financial Complaints Authority said: “The complainant’s concerns regarding the expertise of local repairers and possible damage to her instruments are understandable. However, the insurer’s right to inspect the instruments is clearly set out in the policy.”  

“The inspection will assist the insurer to make an informed decision about the nature and extent of any damage and if it is covered under the policy.”  

The insurer must provide a list of experts – from which the woman can choose – to complete a damage assessment. A claim decision should be made based on the expert’s findings, unless more information is required.  

AFCA has rejected the claimant’s allegation that Lloyd’s Australia breached the General Insurance Code of Practice by asking for information more than 10 days after the claim was lodged.

It says the requests were reasonable and relevant for assessing the loss.  

See the ruling here.