"All Risk" insurance of valuables

There was a new report that an insurance company refused to pay for the theft of a valuable watch under an "all risk" policy. Their policy condition stated that the theft must occur while the insured item is being worn. It does not cover theft in the house, even if the item was locked.

Here is the reason for the "fine print" in the insurance policy:

* the owner may be careless and did not lock the insured item
* the owner may make a false report that the item was stolen, when it was given or sold away

My view?

If the insurance company does not trust the honesty of the owner, it is better to decline providing the insurance.

As the owner, it is better to avoid an "all risk" insurance, if there are fine prints that limit the cover.