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No matter what type of insurance you’re looking for, it’s important to be aware of the situations and circumstances which your policy simply will not cover. So if you’re shopping around for a comprehensive car insurance policy, you’ll need to check the list of general exclusions in the PDS to find out when future claims will be rejected.
What car insurance exclusions should you be aware of? Read on to find out.
It’s not unusual for the list of general exclusions to take up a few pages or more of your car insurance PDS. But while the size of the list may seem a little overwhelming at first, many of those exclusions are simply common sense. If you’re a safe and responsible road user, most of them won’t ever cause you any problems.
Here are 13 important car insurance exclusions you should be aware of before hitting the road.
Yep, it’s hardly surprising that this is excluded from cover. No insurer, regardless of how big its appetite for risk, will cover you if you get behind the wheel with drugs or alcohol in your system.
It’s worth pointing out that this exclusion also applies to prescription medications that have a significant impact on your reactions or thought processes.
And don’t think you can get away with it by refusing to take a test to check for drugs, alcohol or medication in your blood, as this will also cause any related claims to be rejected.
When you take out car insurance cover, one of your obligations under the insurance contract is to keep your car in good condition. This means it needs to be well maintained, roadworthy and safe to drive.
With this in mind, it’s essential to:
For more information on your obligations under your policy, check out the ‘Your car insurance responsibilities’ section further down this page.
Although the approach to modifications does differ slightly between insurers, it’s always a good idea to get your insurer’s approval before making any changes to your vehicle. Any alterations to the standard body, engine, suspension, wheels or paintwork of your car that have an effect on its performance, safety levels, appearance or value may influence your insurer’s decision about whether or not to cover you, so you’ll need to get their OK first.
Once you make any unauthorised changes to your car, it becomes a different vehicle to the one your insurer originally agreed to cover. So if you don’t tell your insurer about any mods you’re planning, future claims could be refused.
When you apply for car insurance, most insurers give you the option to restrict cover to drivers above a certain minimum age. This minimum age limit is usually 25 years, but some providers also give you the opportunity to only cover drivers over 30 years of age or potentially even older.
Selecting the restricted driver option is a great way to cut down on premiums, but it could be a costly decision if you ever need a younger driver to get behind the wheel of your car. So before you tick the box to choose this option, think about whether you’ll be likely to ever need a friend or family member under the age of 25 to drive your car.
If you select this option and your car is being driven by someone under 25 at the time of an incident, don’t expect your claim to be paid.
If you don’t have a valid licence when you get behind the wheel of your car, don’t expect your insurer to cover you for any incidents that may occur. This exclusion also applies if you have failed to renew your licence in time, or if you’re in control of a vehicle you’re not licensed to drive. So make sure you regularly check your licence expiry date and check any terms and conditions that may be attached before hitting the road.
Another item listed in the car insurance general exclusions is no cover if you drive your vehicle while it is unregistered. Forgetting to renew your rego is an easy mistake to make, particularly now that physical rego stickers are a thing of the past, so make sure you’ve got all the proper documentation and made the necessary payment to be sure of maintaining cover.
It shouldn’t come as any surprise to find out that driving your car while it’s overloaded is a dangerous and also illegal practice, and is therefore excluded from car insurance cover. The overloading exclusion applies to the following scenarios:
Take special note of the towing exclusion in the last dot point. If you’re planning on towing a trailer or caravan, check your car manufacturer’s specifications to find out how much your vehicle can safely tow.
This is one common exclusion that many Australian drivers are unaware of, but it’s important to consider before you hit the road. Under the Motor Vehicles Standards Act 1989, the minimum legal tyre tread depth in Australia is 1.5mm – replacing your tyres before they get to this point is a critical safety measure.
Driving on worn-out tyres is dangerous and should never be done. And if you have an accident while your car is fitted with tyres that don’t meet the minimum safety requirements, your claim may not be approved.
While we’re on the subject of tyres, car insurance also won’t provide any cover for tyre damage caused by:
With this in mind, there’s even more reason to regularly check the tread and overall condition of your tyres before getting behind the wheel.
Following on from the above exclusion, comprehensive car insurance won’t cover any claims that arise due to gradual deterioration or general wear and tear to parts of your vehicle. Insurance policies are designed to provide financial protection against unexpected events and mishaps, not against the general ageing and deterioration of your vehicle that occurs naturally with regular use.
This means you won’t be covered for claims caused by:
So instead of relying on your car insurer to cover every single little thing that could eventually wear down on your vehicle, it’s your responsibility to stay on top of ongoing maintenance and any minor repair requirements as they arise.
Has your lead foot finally come back to haunt you and caused the authorities to confiscate your car after yet another speeding ticket? Did you list your vehicle as collateral for a car loan and then have it repossessed when you defaulted on your repayments?
In either of the above scenarios, don’t expect any financial assistance from your car insurer. Whenever your car is legally repossessed or confiscated, or even if it is lawfully destroyed by the authorities, no cover is available under your comprehensive car insurance policy. This exclusion also applies to any personal items or possessions that are carried in your vehicle and legally confiscated or repossessed.
You’re on a country road in the middle of nowhere when your car’s ancient timing belt finally gives way or its computer infotainment system suffers a catastrophic failure. No worries – you’ll be covered for the cost of the resulting repairs by your car insurance, right?
Wrong. Comprehensive insurance covers you for loss or damage caused by a number of defined events, such as accidents, storms, fire, theft and vandalism, but it doesn’t cover you if your car breaks down. Instead, you’ll find protection for most mechanical failures on new cars under the manufacturer’s warranty and Australian Consumer Law.
While the wording may differ slightly from one policy to the next, most insurers will exclude claims that arise due to any structural, mechanical, electrical or electronic failure or breakdown.
However, if you’ve selected a roadside assistance option as part of your policy, you may be able to access minor breakdown-related repairs and emergency towing services.
Do you feel the need? The need for speed? Sorry, Maverick, but indulging in your desire to go fast could cause any resulting car insurance claims to be rejected.
Car insurance will not provide cover if you participate in any kind of motor sport, such as:
Unsurprisingly, you also won’t be covered if your claim arises because you were participating in street racing, or driving recklessly (donuts, burnouts and the like). So it might be time to put your need for speed to one side and focus on your need to drive safely and maintain your car insurance cover.
‘Renting’ your car to a friend for a couple of months while their vehicle is off the road? Driving for a rideshare service like Uber and using your car to earn some extra money?
In both of the above scenarios, if your car was damaged by an insured event your claim would be rejected. All comprehensive car insurers exclude claims that arise because your car was being used for hire, fare or monetary reward.
However, the good news is that car pooling arrangements are usually covered. And if you’re planning on becoming an Uber driver, check out our guide to rideshare car insurance to find out how to get the cover you need.
This is another exclusion that should be obvious but is worth mentioning nonetheless. If you don’t pay your car insurance premiums on time, your policy will lapse.
This can be a pretty easy mistake to make. An expensive car insurance renewal is hardly a welcome arrival in anyone’s mailbox, but the decision to put it aside to “deal with later” could come back to haunt you.
Do whatever you have to do to make sure you remember to pay your annual renewal on time or, if you pay by the month, consider setting up an automatic direct debit so you never forget.
The situations listed above are only some of the events and circumstances that comprehensive car insurance won’t cover. There are plenty of other exclusions that apply, such as:
One of the first pieces of information you see when reading a car insurance PDS is details of your duty of disclosure. This section refers to your responsibility to tell the insurer of anything you know, or could reasonably be expected to know, that could be relevant to the insurer’s decision about whether or not to cover you and your vehicle.
What does this mean for you? When you’re applying for cover and the insurer asks all those questions about you, your car, your driving history and a range of other factors, you must tell the truth.
If you’re dishonest in your application or if you conveniently ‘’forget” to mention any important details, any claims you make in the future could be reduced or refused. In some cases, the insurer may even cancel your policy altogether.
So if you’re thinking of leaving out details of a couple of previous insurance claims or “forgetting” to list a driver under the age of 25, think again. While it might help you achieve a lower premium in the short-term, the long-term financial consequences can be severe.
Remember that this duty of disclosure also applies when you renew your policy. Unless you inform your insurer of any changes that may have occurred, it will assume that there have been no changes to any circumstances that could affect your cover.
When you take out car insurance cover, you agree to meet certain obligations under the insurance contract. If you fail to meet those responsibilities, your policy could be voided.
To ensure that you will always be covered by your policy you must:
If you don’t meet any of these responsibilities, the insurer can pursue either or both of the following options:
And if you’re guilty of fraud, the insurer is well within its rights to treat your policy as if it never existed.
The sheer length of the list of general exclusions from most car insurance policies can seem a bit overwhelming at first, but the reality is that most of them are commonsense and can be easily avoided. If you stick to the road rules and abide by the terms and conditions outlined in your policy, you shouldn’t have any trouble accessing the cover you need if you ever have to make a claim.
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I have a really elderly male acquaintance who has had a fall and his shoulder is severely restricted but he insists on driving. What are the implications for insurance if he causes an accident in this state of health due to his restriction? I am extremely concerned for him.
Hi Wyn,
Thank you for getting in touch! There’s no explicit restrictions on this type of thing unless he’s been advised that he shouldn’t be driving by his doctor. If that’s the case and he’s found to be driving, it’s probable that a claim might be denied.
If he does have the green light to drive and does end up getting in an accident, his CTP insurance should cover the legal and medical costs arising from the accident.
I hope this helps.
Cheers,
Jeni
Hi,
I had a incident with my car where my engine bay caught on fire, i filled up with fuel not long before i was driving along the highway for about 3kms after leaving the service station i stopped at a set of traffic lights then started to drive again. As to me being unaware my car had caught alight i then proceeded drive for another 2kms unaware to have my car loose power an suddenly stop as i was pulling to the side of the road a witness stopped going in the opposite direction to try and get my attention the my vehicle was in fact on fire, to which then a fireball went up the windscreen and the whole front of the vehicle was on fire.
I have had a mechanical report done on vehicle to which the report came back that inlet fuel line to injector rail manifold had came off under loaded pressure and fuel vapors and fuel had covered the engine bay an covered electrical to which helped ignite the fire.
Now the insurance company still hasnt taken liability for the claim or given me their outcome its been almost 10days, ive been told my claim is been investigated and assessed.
What is your professional opinion on my situation with getting a positive?
Will the insurance company try not to take liability for this?
Hi Stuart,
Thanks for reaching out! I’m bummed to hear about what happened – great to know you are okay! As much as I would like to help out – we aren’t in the position to give professional advice as we are a product comparison website and not experts on car insurance claims. I suggest to follow up on your insurance while reading the terms and conditions of your policy. Hope this helps and hope this gets resolved soon.
Cheers,
Nikki
I had a fire on my vehicle within the back wheel in the brakes. the fire siezed the brake and calliper so much so that they had to use a sledge hammer to belt it off. The insurer is saying its mechanical fault. The fire is the issue. Not worried to take off the part and replace it if that was the case. The fire welded and distorted the parts requiring extra labour and making the parts unserviceable. Cost $3k
Hi Robert,
Thank you for your comment.
I’m sorry to hear about this. Although can’t really give you a personal advice to your situation, I understand that you’d want to validate that the issue was a not mechanical breakdown. In this case, you might need to speak to your insurance company again and discuss what can be done. But before doing that, you may want to revisit or check your policy again and see what you are covered for and check how you can prove that the fire was the real issue. You can draft a narrative of what really happened and that your car was in good condition when the fire happened.
In case there’s no resolution to your appeal, you can escalate it to the dispute department of your insurer and you’d need to put your complaint in writing. Although we hope that your issue will be resolved at this stage, otherwise, you can then go ahead and contact Australian Financial Complaints Authority (AFCA). Please note though that it may take time before your complaint with AFCA will be resolved.
Hope this helps.
Cheers,
May