Reasonable Care

The first thing to know is that the obligation of reasonable care depends on the words used in the policy.  Some refer to “recklessness” others to “reasonable care”.  What is important is that an insurance company can’t decline just because someone was negligent – that’s exactly what insurance is for

Reasonable care relates to an obligation on the insured to take suitable precautions and avoid risk.  Reasonable care is currently defined by the courts according to the objective test of whether the insured applied reasonable precaution under the particular circumstances.

The New Zealand courts apply what is known as an objective test to the question of reasonable care. This is based on what a reasonable person would have done under similar or the same circumstances

Whether someone has breached this duty can be a “finger in the air” exercise, and it is very difficult to set out any concrete rules.  However always remember that insurers must have regard to the fact that insurance policies are intended to insure owners of property against a variety of perils including loss suffered due to the insured's own inadvertence or negligence.