How to AVOID voiding your car insurance
Buying insurance is purchasing an insurer’s promise to pay - but will the insurer pay your claim? Not “voiding” your car insurance involves many things of common sense, however here are some special hints and tips on what may not occur to all motorists:
Most policy holders would probably agree that one should tell the insurer if an after-market turbo or super charger is bolted onto a car’s engine. This is part of an insured’s “duty of disclosure”. That duty on the insured most importantly occurs when first taking out the policy and on annual renewal. Be careful how you answer the insurer’s proposal form or initial telephone interview questions. However it is also a continuing duty - for any time - during the policy’s duration.
So, what information should you disclose? Anything the insured does, in fact, know or would reasonably know as relevant to the insurer’s decision to accept the insured’s business, and on what terms. However, one need not disclose anything of common knowledge or information the insurer ought to know anyway, nor anything that actually lowers the risk to be insured.
Each insurer has “underwriting guidelines” on what business it wants to take and on what terms (including premium price, excess levels and so on). If an insurance company can prove it never would have underwritten, for example, a Subaru WRX owned and driven by a 90-year-old person, then it may be in a strong position to deny the claim if full disclosure is not made.
From extreme circumstances, there are less obvious issues that may confront an insured being paid the claim. If something affects the driver’s ability to control a vehicle then the insurance, for all intents and purposes, may be “void”. That may include: driving under any influence of alcohol or drugs (prescription or otherwise); overloading the car or any trailer it may be towing; or failing to reasonably maintain the car to roadworthy condition (such as having bald tyres). Beware also of giving permission for non-listed persons to drive your car. If in doubt, call your insurer to get approval and make full written disclosure up front.
How do I compare car insurance policies?
RateCity is the best website to shop around on for car insurance and most other financial products. At RateCity, you can use expert comparative data from CANSTAR CANNEX, Australia’s leading financial research and ratings firm. CANSTAR CANNEX has independently analysed and evaluated products from 23 car insurance providers to award five stars to only the very best. The CANSTAR CANNEX star ratings go much further than just looking at premiums. They also look at driver profiles, state of residency and other factors which may affect premium price so you can be confident you are getting the best product.
As well as comparing car insurance policies at RateCity, you can also get instant quotes from leading Australian car insurance brands.
Article written by Ross Lee, principal of Lee Lawyers, specializing in insurance law and injury claims. Visit www.insurancehub.com.au
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