Millions of Australians driving without car insurance

Andrew Munro 9 June 2017

Two cars in accident

Finder.com.au analysis of industry data reveals a troubling insurance gap.

Car insurance data from the 2015-2016 General Insurance Code of Practice Report shows that there may be around 4 million uninsured drivers on Australian roads. With 18.5 million registered vehicles on the roads, but only 14.5 million consumer vehicle insurance policies issued, there might be millions of drivers without any form of property damage car insurance.

While this data only shows policies issued or re-issued in 2015-2016, does not include policies sold by non-code insurance subscribers, and may not account for cars registered but not driven, it still shows a striking gap.

To make matters worse, there were over 2 million motor insurance claims lodged in the same period, a startling increase of 6% on the year before, making it increasingly likely that drivers might be left out of pocket following accidents.

What 4 million uninsured drivers means for you

Millions of uninsured drivers, as many as 1 in 5 cars on the road, is bad news for everyone else. If they cause an accident, you might be left out of pocket. With comprehensive car insurance you can be covered for the full damage, up to a total loss, but if you only have the cheaper third party property damage car insurance, you might have a very limited level of cover.

With claims on the rise, and a staggering number of drivers taking the road uninsured, it can be well worth reviewing your existing car insurance and checking the price of a comprehensive car insurance policy, or reviewing your third party property damage car insurance for an "uninsured motorists benefit". With this feature you can still get some damage cover for uninsured driver accidents. Not all policies will include it, however, and when they do, it's typically limited to around $3,000 of cover. If your car is extensively damaged, or a total write-off, $3,000 might not get you too far.

What happens if an uninsured driver is liable for the costs?

Uninsured drivers are unlikely to be able to pay for extensive damages. They might be liable, but that doesn't necessarily mean you'll be able to get the money, especially not without legal actions. Car insurance is designed to help bridge this gap, and insurers may take legal action at their own expense to recover claims from liable parties after paying out.

It's also important to remember that the "at fault" party is the one who has been proved to be responsible for an incident. Once again, car insurance providers are often the ones who take the necessary steps to establish fault. It's easy to overlook the legal liability expenses sections of car insurance policies, but these can be just as important as damage cover.

What to do following an accident with an uninsured driver

  • Exchange details with the other driver immediately, and take note of the exact time and location of your accident.
  • Take photos of the damage incurred to both vehicles.
  • If necessary, contact the police.
  • Lodge a claim through your insurance company as soon as possible after the accident.
  • Get expert advice to discuss your legal rights. Your car insurance provider will often be able to assist you with this, and policies can cover legal expenses incurred in pursuing claims and collecting damages from at fault drivers.

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