Rejection of claim under the "care and custody" provision

A consumer sought my help on a travel insurance claim.

She bought a travel insurance policy to cover the period that she was overseas. She rented an apartment. She was shocked to find that the apartment was burgled and the wallet, which was kept in the bag, had been thrown on the floor, with the money taken away.

She made a policy report and filed an insurance claim. She was shocked to receive a rejection of the claim as the money was not in her "care and custody". The travel insurance policy cover theft of money that was in her care and custody.

The claim officer interpreted this provision to require that the wallet kept in the bag was not in her "care and custody". I wonder if the officer expect the policyholder to keep the wallet with her even whe she was sleeping?

My interpretation is that the travel insurance policy should cover money belonging to the insured and also money from someone else that is given to the insured for "care and custody". It will not cover money belonging to other people that were not given to the insured for "care and custody".

I am surprised that the claims officer of the insurance company could have interpretation the "care and custody" provision in the manner to reject the claim.