What you may not know about Motor Vehicle Insurance

When insuring your vehicle you need to know a few things.

The first thing you need to know is the make and model of your vehicle as well as any accessories or modifications.

Accessories such as sign writing, windshields, alloy rims, leather trim, tinted windows and the like, if not specified on the policy, may not be covered. If you have fitted modifications like wider tyres or a lift kit, your vehicle may not be insured in the event of a claim. Some companies will not insure a vehicle with certain modifications and some charge extra, so is very important that the insurers know exactly what they are insuring.

Secondly, what are you using your car for? Is it just private use or is it commercial, trades or used as an Uber? A lot of insurers aren’t covering vehicles used as Uber’s or other ridesharing/taxi types of businesses. This makes a big difference not only the acceptance of cover, but also the cost of the policy. A vehicle used as an Uber or other ridesharing business may not be covered at all if the insurer hasn’t been notified and it has been agreed in writing.

Thirdly. Are you aware of how total loss claims will be paid? Many companies pay the Market Value, (or Agreed Value depending on the policy type) at the time of loss, less the excess and they do not refund the left over premium. They will issue a letter that you can take to the Vehicle Registration authority in your state to receive the refund of unused registration. The policy ceases when a total loss occurs, so when you purchase a new vehicle, a new policy needs to be taken out.

However, AAMI and Budget Direct for instance, as well as many other insurers, may also deduct any unused registration or compulsory third party payments from the total loss settlement. If you have just paid your registration this could amount to over $800.00 which is a considerable deduction.

Finally, in accordance with your Duty of Disclosure, you must advise if you have had traffic infringements which haven’t been advised to your insurer. These include speeding fines and other motoring offences but exclude parking fines. A couple of one point fines is usually OK however they still need to be noted. If you are unsure of your driving history you may wish to contact Vic Roads, or the equivalent in your state, and obtain a printed declaration. If any driver has had their licence lost or suspended due to loss of demerit points or driving under the influence of alcohol or drugs, this will impact the insurers acceptance of the risk and may result in a denial of claim at the time of an accident if not notified prior. This condition applies to any driver of the vehicle, not just the named insured.

This is just a brief outline of your obligations as a customer insuring a motor vehicle. Please give me a call or email if you would like to discuss any of the above or would like an insurance quote for your own vehicle.