5 Ways to Get Your Claim Denied

I’m sitting here telling myself that I’m supposed to be getting away from technology by being out here. It’s 6:30 am at the Junction campground just up near Coffs Harbour – a magnificent spot I hadn’t explored until now.

I owe the idea of this article to Ricko from The Offroad Adventure Show, you are the reason why I dragged myself away from my desk to go out for a few days – cheers mate.

His words were – every negative has a positive. Never have truer words been uttered. Specifically, it was regarding the negativity in the market around “Club 4X4 not paying claims”.

I could bang on for hours about us having tens of thousands of customers and having managed thousands of claims but you won’t believe me, right?

Well here’s what I’m going to do instead – i’m going to present to you the 5 main reasons why your claim with Club 4X4 (or any insurer really – but you won’t see them being as forthright as I am) could be reduced, or refused.

1)     Misrepresentation – The questions that are asked of you when you do a quote are incredibly important. They allow us to determine whether we can insure you under our guidelines and if so, what premium we need to set. If we would have knocked you back during the quote having had the full information and we find out at the time of claim that the information was wrong, is it right to expect to get paid? And should everyone else have to fund that potentially claim? The main culprits are previous claims and driving offences, so if you’re not sure, get the facts and give us a call to get it right.

2)     Doing something illegal – hooked up the snatch strap to the ATM at the local servo hoping for quick score? Well your claim isn’t going to get very far. Any claim made whilst undertaking any illegal act will be denied. This includes trespassing and going into closed tracks or closed roadways.

3)     Not adhering to license conditions – Different states have different rules, but younger drivers on provisional licenses have conditions on their licenses that stipulate when they can drive and who they can have in the car. Roll the ‘Lux at 3am with 4 mates in the car and on P Plates – we certainly hope everyone is OK, but there will be issues. Others have medical conditions that necessitate prescription medication or even glasses. Finally, stick to the license class, you can’t drive a Heavy Rigid on a Class C license (nor should you ever try!).

4)     Illegal Modifications – So we have talked about this one at length and here is an article that will give further context. Our position on modifications it that it’s on the owner to ensure the vehicle is compliant with the legislation in the state where it is registered. Our position on a claim is that if the illegal modification could have contributed to the claim, then it is likely you will have an issue. Got 3 inches of lift with 35’s and had a rear-ender in traffic, no problem. But did you roll the same rig down an embankment, totalling it – yes you will have an issue. In that specific example the reason is because the increased centre of gravity would have likely contributed to that incident – and that is the key word; contribute.

5)     Contributory – if it is deemed that you contributed to the incident, then there will almost certainly be issues with your claim. Left your keys in the car or the doors unlocked and it got stolen? Did all your 12v wiring yourself with incorrect gauge cable and no fuses? Was it shockingly revealed that you rolled your car off a cliff yourself or arranged for it to be stolen and burnt out? All of these are circumstances that could see your claim reduced or refused.

Something else to note is that where your claim is denied, this declination goes onto a central register and you will need to notify all prospective insurers of it. Should there be any potential fraud identified there is also a very real possibility of charges being laid and that tag landing next to your profile, which you will also need to declare for quite some time.

So looking at the above – are any of these circumstances unfair? Would you want to pay through your premium next year for the cost of someone who thought it was reasonable to get paid in these circumstances?

As mentioned above, if you’re not sure, check it and come back to us. The process of taking up insurance is entering into a contract – you wouldn’t misrepresent yourself on a contract with a bank or other organisation would you?

Hopefully this helps to bring some context and sense to what you may be seeing online.

 

Happy Touring

Kalen

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Comments 55

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  1. All seems perfectly reasonable to me, Kalen – over the years, I’ve seen very few modifications that are “needed” to hit the tracks that can’t be engineered if they’re not an off the shelf product like a bull bar or underbody protection.

    That being said, the cost of engineering modifications can be prohibitive, which is why I believe there are a lot of back yard installs running around on the road, hoping they won’t have an accident, or a bit of a “she’ll be right” approach should they have an accident.

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      Hi Andrew,

      Thanks very much for your comments.

      It’s the “She’ll be right” attitude that leads to many of the above issues and ultimately, issues at claim time. It’s that same attitude that thinks you should pay for that claim – because ultimately that’s what happens.

      These are incredibly difficult decisions and none of my staff or I enjoy making them. But as an adult you enter into a contract and like any contract there are terms, conditions and consequences if you break them.

      I wanted to put this out there because it’s really easy to see frustrated people posting comments on various pages and sites without the complete and full context and as a business there are times when we simply cannot respond.

      Neither me, my staff or anyone involved in Club 4X4 take any pleasure out of, or go out of our way not to pay claims, but everyone is responsible for their actions.

      Next time you read a post about a declined claim – think about which of the above 5 could have been the reason for it.

      Kal

      1. The first thing I do is to read through the Policy terms and conditions. Being overweight is just a part of the conditions. Depending on the insurance company, there is one or more clauses in one form or another which says, that “you must not exceed the specifications or designed conditions of use for the vehicle” . This raises the question of design changes that are signed off by a registered engineer (C P Eng) when you are involved in a collision or event. Furthermore, when crossing water up to the door handles even with a snorkel when max fording depth is 500 to 750 mm and you drown it, you would not be covered by any policy. I have read, yet you see photos in mags (incl Club 4×4) where this is being done on a regular basis.
        For the record I was involved in the documentation process for rollover and swerve testing of busses and heavy vehicles.

  2. My gripe with insurance companies is that when you insure for agreed value, the figure that u come up with is usually way lower than what can be bought or replaced for that amount even without accessories.
    The market valve given is the same, this is what gets up people’s noses, it’s all one sided and you have to except the crumbs you throw at us knowing we have to have insurance.

    Shane

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      Shane,

      I am really a bit baffled here. An agreed value is just that – the value you agree to at the beginning of your policy period is what you get paid out for that entire policy period until renewal. Market value is what is assessed to be the value of your vehicle at the time of the claim.

      What’s different about us is that we put the value of your mods on top of your agreed or market vehicle value. Have a read of this article to help you understand how we do things.

      Kal

  3. Great article Kalen,
    People believe they can hide behind a keyboard when they apply for insurance.

    Then come to grief when they make a claim and try to blame everybody else for their dishonesty.

    Peter

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  4. In a world where often only one side of the story gets splashed over social media its always refreshing to see these people taking the system for a ride are caught out.

    Its a shame that its not as easy for club 4×4 to post up on facebook for example the reasons surrounding their claim being refused, if privacy laws weren’t a thing the world in this case, would be much more crystal clear.

    People are more then happy to write about how they were hard done by, but fail to mention they have a disqualified licence or the keys were left in the ignition for example.

    Good on you guys for sticking up for yourselves.

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  5. All sounds fair to me, no different to any other reputable insurance company. I just renewed with Club 4×4 after changing a few policy options that actually made my premium quite reasonable considering it includes 15k recovery! I did also phone around for other quotes, one company didn’t know what a GVM upgrade was and another have just changed their PDS to state that driving into water of any sort was not covered at all.
    Check you PDS”s closely when renewing folks😊
    BTW Thanks for the open communication Kalen, always read and appreciated 👍

  6. If you go outside start your 4wd up to warm it up go back inside to make your coffee and someone stills your car out of the driveway would you refused a claim

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      If you left your car running unattended then you have absolutely contributed to that theft.

      You would absolutely be denied David.

      Kal

  7. Why do you wait until claim time to look for underwriting discrepancies with the aim to decline / limit the claim instead of at New Business when you have to ability to decline and not leave a customer with a false sense of security.

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      Jason,

      If a customer provides false information to any insurer they or when entering any contract they’re going in hoping for the best.

      Is it unreasonable to expect someone to know how many claims and the details of each claim for a period of 3 years? is it also unreasonable to ask the same for driving history?

      Per my prior comment the process of checking claims comes with a cost and takes time – even just to do a quote – is this something you would be interested in undertaking?

      Cheers

      Kal

  8. My beef with the questions asked about prior claims is you already have access to this information. So why don’t you check it before approving the insurance cover. Not in your interest because you collect money knowing that you won’t have to pay any claims. Its like the banks charging for services not delivered.

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      Joe,

      Absolutely not. The large majority of claims simply get paid. The process of obtaining that information comes with a cost that would need to be worn by the person getting a quote for the coverage and it takes time to conduct the check.

      Would you be prepared to pay for that check? This may be something we may engineer in as a result.

      Kal

  9. If it is deemed that you contributed to the incident, then there will almost certainly be issues with your claim.

    Would fail to give way or you rear ended another car or similar accidents where you are the driver at fault be deemed contributing to the incident and result in claim being rejectred

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      No Alec,

      That is simply an at fault claim. like i said earlier on – clauses around contribution to a claim are commonplace in the insurance market and are generally more geared towards people setting there own car on fire or being involved in a theft or orchestrating an accident or claim to benefit from the payout.

      Cheers

      Kal

  10. The last chapter is the one that concerns me ” Contributory”, this would be an extremely grey area and one that I am sure that insurance companies would use to get out of claims. For example you had a coffee in the vehicle when you had the accident, ” we don’t believe that you where paying full attention to driving when you had the accident”. This is a real possibility and am very concerned about paying out a considerable amount of money every year to have my 4wd’s comprehensively insured only to potentially have my claim knocked back because of some obscure issue. 4×4 insurance has copped their fair share of controversy. (whether justified or not I am not in a position to comment) But one thing of particular concern is the huge increase in some of your policy renewals, without making a claim or any change in circumstances?

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      Bill,

      Appreciate your comments. I think you will find that there is a similar clause in every single motor insurance PDS in Australia.

      Cheers

      Kal

  11. Thanks for the info. But I am concerned About my tires in QLD. I went to a slightly larger tire. From standard at the time it was legal without getting engineered now the corrupt state has made it illegal although they are meant to be changing it. Would I still be covered or would a claim be nocked back

  12. Great article which spells it out in plain English, maybe this should be read to the prospective new policy holder when they ring up for a quote[ if not already in place] After being in the assessing game for 39 years it still amazes me what people expect the insurance company to cover or allow and then whinge when it is not allowed.

  13. Thanks for setting out this basic information. I am a former lawyer who has both worked for insurers and also made claims against insurers on behalf of clients. In my experience my insurer clients have usually tried to find a way to get claims through where things are a little bit rubbery rather than simply denying them. Insurers will obviously vary in their approaches so this will not apply to all of them, but – obviously – they ultimately need to justify why they have denied a claim, and that’s where referring back to the insurance T&Cs come into it. They are the “rules” under which both sides must operate. I chose to insure my Hilux with Club 4×4 because it provides types of cover no other insurer will provide for a 4×4, and also because a mate’s report of a payout by Club 4×4 to a mate with an unusual claim made it sound good enough for me.

  14. Common sense and having SSM Engineered Plate for Modifications and disclosing all too Club 4×4 when Insured. As predominantly a Touring Vehicle, 110% Road Worthy and maintained meticulously, drive to conditions and don’t put yourself, family or anyone at risk of injury when Offroad and know your 4x4s and your own limits. Then there is no reason not to be covered. So many dodgy stuff goes on I’m sure, hence why our Premiums reflect this. I’m happy with insuring my 4×4 with Club4x4, and to be honest, would not put my trust in any other Insurance Company, and knowing full well it is insured to its Value.
    Good reading, especially the “contributing” aspect.

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  15. I have an Iveco 4×4 and on my policy it is labeled a landcruiser ,I have questioned this a couple of times to your sales people and was told it is covered,it does call it an Iveco in the fine print with a single reference,Question-Am I covered for the agreed value or in the event of an accident could this be regarded as non disclosure.thanks

    ; am I covered

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      Kerry,

      There should be an endorsement elsewhere on the policy that specifies the actual make and model. We used to have an issue with our system that didn’t allow us to write in vehicles that didn’t come up on our Redbook feed. We’ve fixed that issue – so give us a call and we can straighten out the policy for you.

      Thanks so much for your business and for trusting us with your beast!

      Kal

  16. Hi Kalen
    Is the vehicle you are depicting in your above article roadworthy with a 3inch lift and 35“ tyres.
    I don’t see how a unroadworthy vehicle can be covered in a bumper to bumper.
    Hard to follow a 35“ tyre up a track with a 31“
    Thank goodness for diff lockers.
    Thanks for a great article.
    Ingo

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      G’day Ingo,

      I’m not sure which vehicle you’re talking about unfortunately??

      Thanks for reading and make sure you share it around!

      Kal

  17. I would really love to see you NOT INSURE people who have illegal mods.
    WHY???? Because people that do that generally have an unsafe mindset, they are the assholes that do stupid shit and pull claims that the rest of us end up paying for.

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      Hi Mark,

      Thanks for your comment and i can sense and mirror your passion, despite the need to remain diplomatic.

      We decided a while ago that we were not the authority or in a position to determine legality and pass judgement on it as part of acceptance criteria. The laws are just too disparate which led to a minefield in terms of setting training and process.

      We could have simply said we will not cover you at claim time if you’re illegal regardless – but given the state to state challenge we implemented a reasonableness factor – where the illegal mod would have to have contributed to the accident to be a concern.

      Hope that helps

      Kal

  18. I suspect that drive into water one was a GIO Policy. Note though, it would not prevent cover for a 4×4 with a snorkel which has been designed to do such a thing. The exclusion is more aro6nd vehicles entering flood water, particularly when they are not designed for water crossings or any minor depth.

    It’s pretty much that contributed to the loss issue.

  19. Great write up Kalen. As an insurance agent and broker myself, we have the same issues with customers of regular vehicles.

    There are quite a few people who think insurers are always ripping their customers off. Alot seem to not understand an insurance contract is one made in utmost good faith in the part of both the insurer AND insured. The little white lie at policy purchase time will bight hardest at claim time.

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      99.5% of our claims are paid Jeramie – but no one trusts an insurer to start with so there is no point talking about that bit! let alone our claim costs are 2.5 times the cost of a normal motor insurance claim because i believe in repairing to a standard not a cost – as an enthusiast and OCD myself.

      We will push on though mate

      Kal

  20. Hi Kalen,
    With regard to agreed value, once established and agreed is that the full amount payable in a full claim during the insured term right up to the end of that term, or ,do you revalue in the instance when a claim is made close to the end of the term paid for.
    best regards
    Joe

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      Hi Joseph,

      The amount on your certificate for that year will be paid right up to the date that certificate ends.

      We absolute would not revalue within that period.

      Cheers

      Kal

  21. All sounds reasonable to me. My father taught me to declare all and said I’d never have any issues.
    Keep up the good work at 4×4 your articles and these forums hopefully make the scammers think, then do the right thing saving us all $$ in the long run.

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  22. Thanks for the great article, at servos I often see people walk up to pay leaving an empty vehicle with keys in it, if stolen would their claim be denied because they have contributed to the theft. Incidentally I am one of the worry warts that locks his car when he pays.

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  23. The ‘Trespass’ thing can be an issue in certain places.

    Tracks are often a maze of poorly marked roads and its all too easy to find yourself on a private road, without opening any gates or passing any signs.

    If you aren’t knowingly on private property (and couldn’t reasonably know) would a claim still be denied?

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  24. Hi Kal
    In your article your wrote about a rear ended vehicle that had a 3 inch lift and 35“ tyres.
    You stated it would be covered in a bumper to bumper accident but not a roll over because the centre of gravity is to high.
    Is your theoretical vehicle a roadworthy vehicle??
    Many people have vehicles that are lifted beyond what is legally roadworthy.
    Do you cover unroadworthy vehicles as possibly suggested in above article?
    I hope I have expressed myself more clearly.
    Thanks ingo

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  25. Have contacted your rep once and the phone no is wrong.
    Have also tried to find the Iveco 4×4 vehicle on your quote site to no avail.
    Hope you can help with info
    Thanks like the true blogs

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      G’day Mark,

      1800 258 249 is the number. The Iveco’s don’t come up online unfortunately as they don’t come through on our Redbook feed – but we can do them manually just give us a buzz

      Kal

  26. But what if the 3inch lift and 35inch tires were properly certified but somehow it still got rolled over offload, as things like that can happen. Will you still refuse the claim?

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  27. Dear Kalen,
    Some Engineered mods (Lovell’s GVM two stage springs) lift the unloaded back by 100mm. Compliance plate provided pre reg. How does that sit?

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