Keyless Relay Theft and the Reasonable Care Condition
Mr and Mrs Ahmed's 2021 SUV was stolen from their driveway at 02:10. The car has keyless entry and push-button start. The key fobs were on a hook in the hallway, about 8 metres from the car. CCTV shows two people using a relay device: one held a box near the front door, the other opened the car and drove it away within 90 seconds. The car was recovered three days later, badly damaged; the repair estimate is £31,800 against a market value of £34,000. The policy includes: 'We will not pay for loss or damage caused by theft or attempted theft if the vehicle is left unattended with the keys in or on the vehicle.' It also has a general condition: 'You must take all reasonable care to protect the vehicle from loss or damage.' The insurer's handler says the couple breached the condition because they did not keep the fobs in a signal-blocking pouch, which the insurer had recommended in a newsletter.
1. Does the 'keys in or on the vehicle' exclusion apply?
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No. The exclusion is narrowly worded: it applies only if the vehicle is left unattended with the keys in or on the vehicle. The fobs were on a hook inside the house, about 8 metres away. The thieves used a relay device to capture and amplify the signal; they did not find keys in the car. The proximate cause of the loss was the relay theft, not the location of the keys. Exclusion clauses are construed against the insurer, and a court would not extend 'in or on' to 'inside the house'. The insurer should not use this exclusion. If the insurer wanted to exclude relay theft or require a Faraday pouch, it needed clear policy wording to that effect, not a newsletter recommendation.
2. Has the insured breached the reasonable care condition? Consider the standard and causation.
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Probably not. The condition requires reasonable care, judged objectively against what a prudent owner would do. Keeping keys on a hall hook is common; the couple locked the car and had an alarm and immobiliser. A general newsletter recommendation is not a policy condition and does not create a warranty. The insurer must also consider causation: even if a pouch might have prevented the relay, the theft involved sophisticated criminal action, and the alleged failure is not obviously the cause. A 'reasonable care' condition cannot be used as a trap to deny ordinary claims. If the policy had specifically stated 'keys must be kept in a signal-blocking pouch at all times', the analysis would differ; then the insurer would need to show the breach and its effect.
3. How should the claim be settled if the insurer accepts liability?
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The claim is a total loss if repair is uneconomic. At £31,800 repair against a £34,000 market value, repair is about 93% of value and likely uneconomic once salvage, hire and diminution are added. The insurer should confirm the market value with comparable retail evidence, deduct any excess, and take the salvage. If the car is repaired instead, the insurer must ensure the work restores pre-loss condition and does not create betterment; the insured may contribute to betterment for new parts on an old vehicle. The insurer should offer a courtesy car if the policy includes it, or explain clearly if not. It should not force a cash settlement without explaining the valuation and the right to challenge it. Settlement should be prompt once liability is accepted.