Motor vehicle insurance

 
  1. The company has accepted my vehicle claim as a total loss, but says my vehicle is only worth $10,000. It was insured for $15,000 and I believe it was worth that much. What can I do?
  2. The company has accepted my vehicle claim but won't pay out on the full sum insured because it wants to repair it. Can it do this?
  3. I paid my annual insurance premium 3 months ago. Last week I had an accident and my car was a total loss, but the company won't pay me back the unused part of the premium. Can it do this?
  4. Is the company allowed to delay a total loss payment for a stolen vehicle?
  5. Do I have to tell the company my son/daughter usually drives the car?
  6. What are "modifications" to my vehicle?
  7. Do I have to tell the company about the new mag wheels and stereo I fitted in my car?
  8. My daughter was driving outside the terms of her licence when she had an accident. Can the company decline my claim on that basis?
  9. I was involved in an accident which was not my fault. I made a claim to the company and I have been told I must pay my excess of $300 and I will lose my no claims bonus. Is this right?

1. The company has accepted my vehicle claim as a total loss, but says my vehicle is only worth $10,000. It was insured for $15,000 and I believe it was worth that much. What can I do?

Most vehicle policies provide for total loss claims to be paid out based on the vehicle's market value. This amount is often less than the sum insured stated in the policy.

The company is likely to base this market value on the average of 2 valuations. If you disagree with the market value the company gives the vehicle, you can get your own valuation from an independent source for the company to consider.

2. The company has accepted my vehicle claim but won't pay out on the full sum insured because it wants to repair it. Can it do this?

It depends on what the policy provides. Usually, the decision about how to settle a claim lies with the company. However, if the company decides to repair the vehicle, it must ensure the vehicle is repaired as close as possible to its pre-accident condition. This includes repairing any accident related damage which might not be immediately obvious.

3. I paid my annual insurance premium 3 months ago. Last week I had an accident and my car was a total loss, but the company won't pay me back the unused part of the premium. Can it do this?

Yes. Insurance is a contract. Therefore, regardless of when you suffer a loss during the period of cover, you must still pay the full premium as you agreed to do when the insurance was arranged. This applies whether you pay the premium in monthly instalments or annually.

4. Is the company allowed to delay a total loss payment for a stolen vehicle?

It is insurance industry practice to do so and normally a period of up to 2 weeks is involved. This delay is necessary, because stolen vehicles are often recovered within 10 days.

5. Do I have to tell my insurance company my son/daughter usually drives the car?

Yes, you do. Information about the age, gender and experience of the driver may affect the cover or terms the company is prepared to offer you.

If you do not tell the company and you later have to make a claim, it may avoid your policy and, as a consequence, be unable to consider the claim.

6. What are "modifications" to my vehicle?

"Modifications" are alterations to the vehicle, which have changed it from the manufacturer's original specifications. Modifications can alter the vehicle's performance or, alternatively, make it more attractive to thieves. Performance enhancing modifications include: fitting a larger engine, modified air intakes, exhaust system and racing suspension. Modifications which make the vehicle more attractive to thieves include: mag wheels, spoilers, body kits, special paint jobs and expensive stereo systems.

7. Do I have to tell the company about the new mag wheels and stereo I fitted in my car?

Yes, if your vehicle has been modified from the manufacturer's original specifications, the modifications must be disclosed to the company. The company wants to know about those modifications which have increased the vehicle's performance and those which have made it more attractive to thieves.

If you do not tell the company and you later have to make a claim, it may avoid your policy and, as a consequence, be unable to consider the claim.

8. My daughter was driving outside the terms of her licence when she had an accident. Can the company decline the claim on that basis?

By driving outside the terms of her licence, your daughter has breached the terms of the policy and, because of this, the company can decline the claim. However, section 11 of the Insurance Law Reform Act 1977 provides that, if you can prove, on the balance of probabilities, the breach of her licence conditions did not cause or contribute to the accident, the insurer will have to pay the claim.

9. I was involved in an accident which was not my fault. I made a claim to the company and I have been told I must pay my excess of $300 and I will lose my no claims bonus. Is this right?

You are responsible for the amount of the excess each time you make a claim, regardless of fault. However, if the other party is insured and his/her company accepts he/she was at fault, your excess will usually be refunded and your no claims bonus reinstated. If the "at fault" party is uninsured, you will have to recover the excess directly from that party.