Preventing Double Frustration in Instances of Theft

You come home from your holidays or from a dinner with friends and realise with horror that your home has been broken into. Your apartment has been ransacked, objects damaged, valuables and irreplaceable heirlooms stolen. More and more people are confronted with this extremely unpleasant experience.

Possible Measures

According to the police crime statistics published by the Federal Statistical Office, the instances of theft are rising sharply. Burglaries and sneak thefts, for example, have increased by 15.9 percent. In 2022, there were 98 of these per day; by 2023, the number had already risen to 114. There was also a significant increase in the number of robberies and pickpocketing incidents, up 38 and 27 per cent respectively. These figures make it clear that protecting your belongings is becoming increasingly important – whether it's through preventive measures or taking out appropriate insurance.

In addition to regularly emptying the letterbox and closing windows and doors, electronic solutions such as alarm systems or automated lighting can also be considered. Additional protection is provided by structural measures, such as security devices on window handles, security glazing or hidden wall safes. Valuables carried on one's person should be stored in a locked bag.

If items are stolen despite these precautions, theft insurance is the only thing that can help to at least compensate for the financial losses incurred. Various insurance products cover theft damages under certain conditions. These include, among others, household insurance, valuables insurance, art insurance, travel insurance and comprehensive insurance. In addition, many providers offer combined products, such as household and personal liability insurance. This allows policyholders to flexibly customise their insurance cover according to their needs using a modular system.

Not All Losses Are Covered

There are no insurance policies that cover all risks. The insurance contract, as concluded, is determinant. The exact content of the agreement reached is crucial, the famous small print. In 2022, the Federal Supreme Court explicitly stated in a ruling on an insurance dispute that even the average policyholder knows that insurance does not cover all risks. As a policyholder, one must therefore expect the insurance company to exclude coverage for specific risks.

Even if the insurance product is described as an all-risk policy, policyholders cannot assume that all risks are covered without conditions. The contractually agreed coverage requirements, benefit limitations and exclusions also apply to these insurance products.

One example of a common limitation is found in household or valuables insurance, where the insurer's liability for stolen jewellery is limited in amount if the jewellery has not been stored in an insurance-compliant and locked security container. According to the general conditions of insurance (GCI), a security container often refers to a safe weighing at least 100 kilograms, a built-in wall safe, or a safe certified to EN 1143-1 standards with at least resistance grade I. Resistance grade I means that someone with a tool needs at least 30 minutes to partially open the safe and at least 50 minutes to open it completely.

The Policyholder’s Behavior

The insurance company is also entitled to reduce the compensation or to refuse it altogether if the policyholder violates statutory or contractual provisions, duties of care, or so-called obligations. In this context, the GCI may, for example, stipulate that the policyholder must notify the police immediately in the event of theft and that the insurance company must be notified of the loss immediately. Normally, theft insurance policies also stipulate that the policyholders must provide the insurance company with all information on the loss and all facts that influence the determination of the circumstances of the loss, completely, correctly and voluntarily.

A 2018 ruling by the Federal Supreme Court shows that these duties and obligations of the policyholder are not just empty words. In the specific case, the policyholder had her earrings worth USD 880,000, insured. The parties to the insurance contract agreed on Swiss law to be applicable and Swiss courts to have jurisdiction. The GCI provided that the jewellery had to be stored in the hotel's main safe and that appropriate measures had to be taken in order for them to be covered by the insurance. The earrings went missing during a trip to the USA. Since the claimant had not stored them in the hotel's main safe and had also disregarded all other precautionary measures throughout the entire trip, the Federal Supreme Court denied the claim.

Theft insurance is often the only protection against serious financial loss. However, the policyholder is well advised to exercise due diligence both when taking out the insurance policy and in the event of a loss. Otherwise, the frustration may easily double.