Most Australian drivers have the intelligence and foresight to get comprehensive car insurance. Unfortunately, even the costliest premiums don't necessarily cover you for everything. There are certain accidents and vehicular misfortunes that will cause insurers to leave you in the lurch. Here are eight grey areas that every insured driver needs to know about, from bumbling valets to the lure of ridesharing.
Car insurance comparison site Comparethemarket has collated a list of common traps and loopholes that can void a driver's insurance claim. The company compared and analysed a number of car insurance policies to determine commonly recurring "gotchas". Here they are, in no particular order.
#1 Failure to disclose an Uber-style ridesharing gig
Even if you only use your car for ridesharing part-time, it's imperative to inform your insurer immediately. "If you make a claim and your insurer finds out that your car was being used in a way that was not listed on your policy, they may reduce or even refuse to settle your claim due to the policy conditions," Comparethemarket explains.
#2 "Fronting" a young driver
It's not uncommon for new drivers to insure a car in their parent's name in a bid to save on premiums. However, this tactic usually doesn't work and can lead to further expenses: "Most insurers price their policies using the details of the youngest driver listed. It could [also] exclude you from earning a No Claims Discount, which could have a negative effect on your future premiums."
#3 Failure to disclose past claims or infringements
When signing a new insurance policy, it might be tempting to hide certain details of your driving history to get a better deal. To do so would be unwise: "Any incidents, offences, infringements or loss of licence by you or a listed driver on your policy may affect how much your car insurance is, but failing to notify your insurer may lead them to cancel your policy, reduce the cost of your claimed damage or refuse your claim altogether."
#4 Your valet dinged your car
Some insurance policies do not cover loss or damage caused by valet attendants parking your car. Carefully check the Ts&Cs in your product disclosure statement (PDS) before handing your keys to a stranger. "If in doubt, make sure you or a nominated driver is behind the wheel at any time, or that the valet service is insured to cover you."
#5 Your car was stolen while on sale
This one came as a surprise to us. Apparently, car insurers have the ability to deny your claim if it is stolen in the process of selling it. "If a potential buyer wants to take your car for a test drive, you should accompany them as a passenger," Comparethemarket warns.
#6 Valuables inside your car aren't covered
It's important to check how much your insurer will pay for items inside the car. Depending on your level of insurance, expensive items such as laptops might not be covered. Explains Comparethemarket: "Each individual policy is different, and your PDS will reveal the most your insurer will pay for items inside your car. Although it varies from insurer to insurer, many policies will only pay out a maximum of $500."
#7 Towing when you're not supposed to
Some policies restrict the carrying of trailers and caravans, or the towing of another car: "Many policies state that any condition considered unsafe, un-roadworthy or overloaded may be grounds to deny your claim. Limits, which vary from insurer to insurer, will also apply to trailers or caravans being towed."
#8 Leaving your keys in the ignition
Well, duh. Leaving your car unattended with the keys in the ignition is likely to result in your claim being denied. This is no different to leaving your house's front door unlocked — you are considered culpable in your own misfortune. "As the driver, you are responsible for making sure you take all reasonable precautions to prevent any situations that may lead to theft."
So what can be done? As with most things in life, the easiest way to avoid these pitfalls is by doing your research. Be sure to comprehensively analyse your product disclosure statement, including the reams of small print. If anything isn't clear, ask your insurer for an answer prior to signing.
Has you ever been stonewalled by your car insurer for something you thought they were covered for? Share your stories in the comments section below!