Claims Explained: What you NEED to know – Issue 5

Over the last couple of months, we have been pulling apart the Product Disclosure Statement and elaborating on circumstances and events for which you are NOT covered. We received great feedback from all of you on the openness and transparency of that series and they were the most popular articles in the Campfire believe it or not! Please be aware, these articles intend to give commentary and practical examples for claims time, but should not be viewed as a substitute for appropriately looking through your PDS before deciding to take up coverage with Club 4X4.

As a result of this feedback, we will now turn our focus to dissecting the claims process and trying to give you a clearer understanding of what you can expect. Ultimately, you pay us for the product to take care of you when you need to claim right? We find most of the anxiety comes from not understanding what the claims process looks like, so hopefully we can clarify things over the next few weeks.

This week we will be talking about excesses that can be applicable to a claim.

An excess, or a deductible as some people know it, is a contribution that is made by a claimant towards the cost of a claim. It is an essential part of running a sustainable insurance portfolio and is, in essence, an income stream similar to premiums.

An excess may be charged in one of the following circumstances:

  • You have had an at-fault incident or collision, resulting in damage to your vehicle
  • You have had a single vehicle accident. This could be a fight with Skippy, or running off a road for example
  • You choose to lodge a claim through your own insurer even though you’re not at fault Read more here.
  • You cannot appropriately identify the person at fault. For example a hit and run, theft, fire or even being given incorrect personal information at an accident scene.

There are a variety of excesses that can be applied to individual policies and will usually be listed on your certificate of insurance. Below is a breakdown to help you understand what each excess may be and when it will be applied:

Basic Excess:  As the name suggests, this is the excess that is applied to every policy. If you have had an at-fault incident, you need to claim through your insurer to repair your’s and the third party’s damage, the basic excess will always apply in this case. Furthermore, if you make a claim for damages to your vehicle and the costs cannot be recovered from an at fault party you will also pay your basic excess. Like many insurers, at Club 4X4 we have four basic excess options to choose from when you start a policy; $650, $850, $1200 and $1800. The higher the basic excess you choose, the less you pay in premiums and vice-versa. Simple, right?

Inexperienced and learner driver excess:

This excess ($1,000) is applicable in addition to your basic excess ONLY when the vehicle was being driven by a person who;

  • Is under 25, or
  • Has not held an Australian drivers licence for more than 2 years, or
  • Who holds a learners permit

So, if you had a basic excess of $650 and the apple of your eye was to rear-end somebody on the way home from school on their L-plates, there would be an applicable excess of $1650 for that claim. This excess does not apply for claims such as theft or malicious damage as such an incident is independent of driving experience.

Unlisted young driver excess:

This refers to the old chestnut – “let’s register and insure my car in my parent’s name so it does not cost as much on insurance.” Under this clause, if someone under the age of 25 is driving the vehicle at the time of a claim and is not listed on the policy, an additional excess of $1,000 is applicable. So using the example in the above section, your excess would total $2650.

Please note that if the young driver is on their learner licence this will not apply as they are accounted for in the inexperienced and learner driver excess. The best way to avoid this is to list everyone who you anticipate to drive the vehicle on the policy.

Special Excess:

In certain circumstances, you may be notified that there is a special excess on your policy. Such an excess could be applied based on special risk, such as vehicle value or past claims such as theft.

For example, let’s say that you have a 1989 GQ patrol and have spent $30,000 on non-standard modifications and is parked on the street at night. Claims experience may indicate that a vehicle of this age and value is highly susceptible to thefts, especially if it is not garaged.

As a specialist insurer, we can agree to add this $30,000 to your agreed value, but we may place a special excess on your policy that applies in the event of a theft or attempted theft due to the increased risk. Please note that you will always be notified of this before you start the policy and it will also be included in writing on your certificate of insurance.

Above are all of the excesses that apply to your vehicle being involved in a claimable event, but we also have some additional benefits that come with each vehicle policy that you may need to claim on. Please see below:

  • Personal Valuables Coverage: This benefit is subject to a $500 excess.
  • Off-road recovery: This benefit is subject to a $200 excess.
  • Locks and Keys: This benefit is subject to a $200 basic excess

So there you have it, short and sweet this week, but great information on what costs may be incurred by you to claim in different circumstances. We hope that this has served to further educate you on how our claims process works if you are unfortunate enough to be involved in an incident on or off road.

Click here to read the previous issue


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Comments 5

  1. I’m still at a loss to understand why using your insurer during a not-at-fault claim will likely lead to a rise in premiums. I read the article linked, and the associated comments, but it really doesn’t explain the scenario. If you just charged an excess for that one not-at-fault incident to cover ‘administrative costs’ (which in itself is questionable), then that would make sense. But by charging that person higher premiums from that point onward, it’s as if you’re saying: “Well … someone crashed into you once, then it’s more likely someone will crash into you again.” Unless there’s some statistic to prove otherwise, I call this illogical bs.

    As with pretty much every form of insurance – health, life, property, income – you are in the business of giving the impression you’re there to “Help us out when things go awry.” And perhaps you’re slightly better at making people feel at ease than others with your grass-roots “we help the off-roaders” vibe you’re got going on.

    But please, don’t try to give us the impression that without these additional excesses and premium hikes for spurious reasons, you’d struggle to stay afloat. Insurance is a lucrative industry for the sole reason that “uncertain times” is the buzzword of the century. People are more cautious and concerned than ever before. And you insurance folks are profiting from it. Big time.

    1. Hi Brett,

      Thanks for taking the time to read and respond to the article.

      The concepts that we have outlined in this article have driven much discussion and debate and views. We knew full well we were revealing something that’s often brushed under the carpet in the general insurance industry and expected this to be very topical.

      Ultimately, insurance is a product. In pure business terms the development, marketing and servicing of a product are the points where costs are incurred. Insurance as a product is unique in that to majority of costs are based on a process that may be enacted days, weeks or months post sale; a contractual promise made to act when the product is called upon. In these basic terms, whenever the product is called upon to respond there are costs associated for the insurer. It is on this basis that a not-at-fault claim is viewed as part of our risk assessment. We feel the only difference is that we are being honest and up-front about it and trying to educate the not only on the issue, but on alternate ways to deal with different scenarios.


      1. I have had many policy’s and have had not at fault claims in the past hence not had to pay any upfront cost of excess and my premiums certainly did not rise because of it.
        Club 4×4 is the first I have come across to operate this way and I think its a money grab.
        we pay premiums that cover any small amount of admin time, we take it for quote, send you quote, you get the cost from their insurer car gets fixed.

        1. Post


          We respectfully disagree. The only way we are different is that we are transparently talking about it as a way to educate.

          Happy Touring


    2. Brett, I’m with you on the increased premiums for a not at fault claim. It’s the same as accusing you of being a high risk driver – how insulting. I had never come across such a ridiculous concept until I arrived in Australia. As a matter of principle I will not insure with a company that follows this policy.

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