7 things you should know about car insurance

Cars in traffic

 

Even if you’ve been driving for years, the following information will help when deciding to renew or purchase motor insurance.

1. Should I negotiate an Agreed Value for my car?

If you have a prestige or classic car you should consider having an Agreed Value. Specialist insurers for classic cars usually use a valuer and agree with you the Agreed Value. An Agreed Value policy may also be beneficial if your vehicle is in above-average condition. For example, if the vehicle has very low kilometres for its age, and is in showroom condition, agreed value may be worth considering.

2. Does my insurance cover me for off-road driving?

If you have a 4WD and you actually use it for off-road 4WD driving on undesignated roads or 4WDrive tracks -  make sure you have the correct cover – your current policy may not cover you.

3. Can I get a cheaper price for my kid’s car insurance under my name?

When applying for insurance, insurers will ask who the registered owner is and who is/are the drivers. You, as the insured, have a duty to disclose the correct information. It’s important to ensure the vehicle is insured in the name of the registered owner and the correct drivers are declared. If you do not answer these questions honestly, the insurer may be able to impose a higher excess or avoid paying a claim. So, if you are paying for your child’s car insurance, and it seems cheaper, you need to ensure you have adhered to the above.

4. How good is my ‘ Lifetime Rating 1’ ?

Some insurance companies offer clients a ‘ Lifetime Rating 1’ . This means the insurer will class you as a Rating 1 Driver, no matter how many claims you make in the future.  However, your premium may still increase.

Premiums are constantly adjusted by insurers depending on the claims they pay and the costs to repair vehicles. Even Rating 1 Drivers with no claims may experience a premium increase. Also, having a Lifetime Rating 1 with one insurer doesn’t mean other insurers will recognise it.

5. Can I choose my own repairer?

If you would prefer to choose your own repairer, you need to ask the insurer before you purchase/renew the policy or check the Product Disclosure Statement. The insurer may not pay the full repair costs if the quote is more expensive than the insurer’s repairer would charge, or includes additional work not associated with the claim. 

6. What if, when I make a claim, I disagree with the value the insurer puts on my car?

Insurers use many resources including industry data, statistics or ‘The Red Book’ or ‘Glasses Guide’ to value your car.  They use a scale of ‘Average’, ‘Below Average’ or ‘Above Average’ condition. But if you consider an insurer’s claim settlement offer to be below the value of your vehicle,  you may decline the insurer’s initial offer and ask to negotiate a revised pre-accident value.

The car’s market value is based on what similar cars in the same condition are worth, and the average price to replace the car at the time of making the claim. If you believe your vehicle is in above average condition, you can provide supporting information to the insurer. You may find useful information on the current pricing of similar vehicles online.

7. If I have a car accident and it’s not my fault, what are my options?

If you are involved in a car accident and the police attend, a report will be made of the incident and you will receive an incident record. If able, it is important to obtain the details of the other vehicle and driver. This includes the details of the vehicle, registration, driver’s licence, address and their insurer’s name and policy number. It’s a good idea to verify the details provided and take photos of the scene. If there are any witnesses, ask for their names and contact details.  

How you have your vehicle repaired or replaced will be dependent on many factors eg. Does the other party have insurance?, is it unambiguous who is at fault?, is the other party co-operative? and do they promptly report a claim with their insurer? If yes, it may be suitable to allow the other party’s insurer to manage the claim.

If not, and you have insurance, it may be best to lodge a claim with your insurer and provide them with the other driver’s details. Your insurer will assess the claim and where appropriate arrange for your repairs and seek to recover from the other party. You may be required to pay your policy excess. However, if your insurer recovers their costs in full your excess may be reimbursed.

Insurance House take the hassle out of insurance. Why not ask them to review your current policy for you. Just call 1300 305 834 or email ih@ihgroup.com.au

 

 

This information is general information only and may not be suitable for your needs. You should consider the product disclosure statement (PDS) or policy wording before deciding whether to purchase insurance.

 

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