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Five pesky policy conditions buried in car insurance contracts
By John Grant
In doing our review of the insurance polices we looked through many dozens of contracts. It is true that no two policies are the same and we found dozens of potentially tricky conditions. See car policy comparisons here.
- Under 25 year old driver
Quite a number of policies have exclusions for any person under 25 driving the vehicle. The exceptions are for those under 25 years olds who have been named and appear in the policy schedule as a named driver or the insured. If you haven't notified your insurer of someone under 25 driving your car you may find you are uninsured.
- Under the influence
Most policies have a clause that excludes cover if someone who is under the influence of alcohol or drugs is driving the vehicle. In most cases there is an effort to define under-the-influence. However a few of the policies require the insured person to prove that they were below the legal limit at the time of the accident. Without a breath test this could be a difficult exercise.
- Painting undamaged parts of the car
There was a condition in one of the policies that stated there would be no cover for painting parts of the car undamaged by the accident.
- Off roading
I wonder if some owners of four-wheel drive vehicles are aware of some policies specifically exclude cover for any use of the vehicle that is not on a road or driveway.
- Liability Insurance
One company that is a major player in the car insurance market has defined the insured person under liability cover being the person named in the schedule. Literally this could be taken as not providing cover for damage to other property if the vehicle is driven by anybody other than the person named in the policy schedule. Fortunately most insurers take a realistic look at this and common sense prevails. However there are grounds for concern regarding the consistency of how these conditions are applied.
The major lesson from this is to make sure you read your policy and understand about those potential areas that could cause problems and either approach your insurer for a written explanation of the way they will interpret it or find an alternative insurer who doesn't have this condition in their policy.
See car premium comparisons here.
13 Comments
"Off roading" Also some might
"Off roading"
Also some might say non-tarmaced?, ie driving on metaled roads isnt covered? not sure, that might be insurance on hired cars and 4wds only? (which is one to watch if you hire a 4wd).
Otheriwse I dont think its that un-reasonable, I dont see how or why an insurance company should cover damage from off-road activities....its kinda self-inflicted....and I have the 4wd to prove it
;]
regards
One other to watch out
One other to watch out for is "principle" driver. So if you are the person paying the insurance and are the main driver, you really need to make sure that you are doing most of the mileage. A few years back an insurance company wanted two premiums, from both my wife and I to insure the same car at the same time....yeah right....time to move.
Also consider the quality of repairs, when I came here I didnt know a good company from a bad one so chose State. Had a small accident and found that their repairs were awful it went back 5 times to get re-repaired....and most repair shops wouldnt in fact deal with State...so I moved.
regards
Good point Steven "Also consider
Good point Steven
"Also consider the quality of repairs, when I came here I didnt know a good company from a bad one so chose State. Had a small accident and found that their repairs were awful it went back 5 times to get re-repaired"¦.and most repair shops wouldnt in fact deal with State"¦so I moved."
A few years ago my 6 mth old XR6 got stolen. State gave the panel beater a budget of $ 150 to bog and paint a door that according to the "State approved" panelbeater was well beyond repair. They also refused to pay for damage caused by their tow truck driver who dragged the car onto his truck with no wheels on it. Huge dust up followed. I won, and once State had paid $10k for the repairs to the car told them what to do with their policy.
False economy on their part one would think.
Regarding 3 Painting undamaged parts
Regarding 3 Painting undamaged parts of the car
Which insurance company is that?
When you have to repair a damaged part of a car, the entire panel needs repainting, otherwise you will be able to see the repair, so if they are only repainting part of the panel, that would be a company to avoid.
We also used State to get a repair done, and the place they recommended was very poor, and they initially only repainted part of the panel. We had an entire defects list that we had to give the panel beater to correct. In the end it was an okay job, but the paint colour is very slightly different.
Would be really interested whether
Would be really interested whether you are going to look at business insurance for small businesses. Such as professional indemnity insurance and similar.
The point of car insurance
The point of car insurance is so that your car can be repaired to a state that it was in before the accident. If they only pay for the painting on part of a panel, and you can see the repair, then the repair is insufficient. Any insurance company that has such a policy should be given the boot!
Wouldn't it be great if
Wouldn't it be great if this stuff was taught in schools?
* What is car insurance?
* How does it work?
* Compare the following policies...
Maybe they do already?
If the consumers of a service generally do not understand/do their homework, then the whole market-place suffers because providers are not forced to up their game.
Unfortunately the list of 'Pesky
Unfortunately the list of 'Pesky Policy Conditions' is very long and most companies have one or two little treasures.
It does not mean that they will interpret them in the same literal way that they have been written.
They are ambiguous and lead to confusion or at least have the potential to do so. For example I've never seen a company only partially paint a panel damaged in an accident.
However my point is why have that condition if you are not going to apply it? There are a couple of classic examples in Travel Insurance and I will feature a story on one of these in the next couple of days.
John
John, there are ads on the
John, there are ads on the local radio stating that you don't have to use the insurance companies preferred repairer and that the insured can choose who they want to repair the damage. If this is the case, in practice, do they limit you to what $ they will pay for the repair. I wonder if there has been a change as I always thought that the insurance company stated who to take it to to be be repaired.
Your column is most informative!
Im insured with Tower
Im insured with Tower Insurance and had the misfortune of an accident. They asked me if i wanted to choose my own panel beater or i wanted to use one of theirs. If i had to sellect one of their panel beaters i would get a life time warranty on the repair of the car as long as i owned it. So i decided to choose their panel beater and am a happy client.
Sometimes this restrictions
Sometimes this restrictions of car insurance companies are really pain in the ass. That's why it is really wise to read first before getting your car insurance quote.
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