Economic uncertainty ahead – some initial thoughts on navigating it…

It’s undeniable that we are facing unprecedented risks to health in Australia and across the globe; the directions around social distancing and staying at home for all but vital excursions is clear and at Club 4X4 we are taking this seriously and have all our staff currently working from home as a result. We are available as we always have been to service your policy and claim requirements.

Another significant issue, more for some than others, is financial challenges. With uncertainty about jobs in some sectors, Australians will unprecedentedly be looking for ways to make sure that the bills get paid. For some of us, that will mean tightening the belt, and for others it will mean more drastic measures. The priority here is to protect the ones we love and the assets that we’ve worked hard to build.

There is no doubt that some hard calls need to be made, not only because budgets are tighter, but because our ability to get back what we have now will be reduced by the challenges – I.E – with less income and a potentially uncertain future, more than ever we cannot afford to lose what we have.

The first thing that has probably crossed peoples minds is alternate employment – if your job or business shuts down, what would your earning potential be? Next, what might the bank do in these uncertain times, and what is available from the Government?

Some of us will have income protection insurance and will be curious if that can be used. Unfortunately, even if you’ve got income protection, unless you can’t work for the qualifying period as the result of getting sick (and this period is usually 30-90 days), then you wont be able to claim on that.

From there, most of us will look to cut non-critical expenses, things like new clothes, eating out etc (which is limited to takeaway now anyway). And when this is done, insurance will come up at some point and you’ll be tempted to look for the cheapest option.

It is really important that you don’t lose sight of the fact that insurance is the last line of defence for your assets, and now more than ever it is critical you make the right decision around it. Because if something goes wrong, you will be in less of a position to wear the financial risk or recover from that loss yourself. You may simply think that switching to cheaper insurance is ok because the risk of loss is lowered if you are at home, but you may well be wrong in that assessment.

We could be looking at unemployment levels that rise, and we are already seeing fighting over items that are as trivial as toilet paper and baby wipes. Could this lead to a higher instance of theft of property as people find ways to fill gaps? I don’t want to sound alarmist, but history and experience shows this to be the case.

I can forgive you for thinking I’m wrong here, but the question I ask is what would you do if your pride and joy is stolen overnight and isn’t insured appropriately? Or more likely, you wake up and it has had a heap of its accessories nicked?

As you need to manage your budget, you need to weigh up what risk you can accept for your vehicle and trailer or caravan insurance. And it is important that you do your due diligence. And this may mean simply calling your current insurance company and checking that your policy is setup properly for your needs. Regardless of who you choose, please consider:

Sum insured – does the overall sum insured accurately represent what the vehicle would cost to replace? If not, are you happy to accept that loss and are you prepared to live with a replacement that is not equivalent to what you have now? Is the sum insured appropriate to cover finance remaining on the vehicle – you are in breach of your agreement if not!

Mods and accessories – does your policy cover all of your mods and accessories? And when I say cover, I don’t mean just having it listed on a piece of paper, I mean does your sum insured reflect the total cost of those additions? If not, why not? Have you asked your current insurer to cover them? If not, you could be under insuring and again end up with less than what you have now if the worst happened.

Discounts – are you getting the most from your policy here? Think multi policy discounts, driver training discounts, age exclusions, 4wd Club memberships and more. They can add up significantly!

Excesses – if you increase your excess, you can reduce your premium, although you then take on more of the risk. But it can provide some financial relief.

There is a lot to think about here. Insurance is a product worth looking into as part of your budget review. Only you can make the right decision, but the team at Club 4X4 would be happy to do a health check on your current policy or quote you on your insurance. Being focused on the 4X4 enthusiast, we pride ourselves on being able to tailor a policy to your needs. When you call us during business hours you get a real person based in our NSW call Centre who genuinely cares about ensuring you get quality service and and enjoyable conversation. As always just call us on 1800 CLUB 4X4 (258 249) or email us at contactus@club4x4.com.au and we will get back to you.

Don’t forget to keep things in perspective – changing to the cheapest possible insurance might only save you the cost of a cup of coffee or so a week, but the difference in cover and sum insured could be chalk and cheese.

So the big question you need to answer before you cut your insurance is, do you really need more than one streaming service at the moment? Really? Because the hard truth is that spending less on entertainment is probably going to net you a bigger economic saving than saving a buck on your insurance if you need to make a claim.

I sincerely wish you all the best of luck over the coming weeks and month and we’d love to keep this discussion going – we’ve got some financial experts on board and will look to answer your questions about anything finance or insurance related here – tell us what you want to know and we will start getting some answers!

Take care, and stay safe,

Kalen

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Comments 4

  1. Hi Kalen. I like the product you offer and am a current customer. One of the big issues facing us at present is the travel bans, movement restrictions and state border lock downs. Beside trying to preserve cash like crazy at present, the biggest issue for me in renewal shortly will be the “remote recovery” option which obviously adds cost to the premium. My understanding is that you can only elect to take the remote recovery option at renewal and not part way through a year as an upgrade. The problem at present is that we are unable to use our toys, especially as now is commencement of “grey nomad” time and as such, we would be paying for a cover that cant be used or electing to not have it because of that and not be able to get it later when the restrictions are lifted. Perhaps this is something to consider offering your clients in the current climate. This way, you might increase the chances of retaining customers via flexible options?? Food for thought.
    Regards & keep safe.
    Murray

    1. Hi Murray,

      Thanks so much for the detailed response and for your custom.

      A really well thought out concept. You’re right, we do have conditions for how these additional products can be added to policies.

      The same concept was brought up by a number of my team at one of our daily catch-ups in the last couple of days. I’m so glad that the idea has been validated by you, a customer, as something worthwhile.

      We are living in extraordinary times, so my directive to my team has been to think in extraordinary ways. As such i’ve encouraged all of my team to consider the needs of our customers, propose solutions and where it’s conceivable and works we will certainly do it.

      I can say over the last few days we have removed extensions of our Off Road Recovery Cover for motor vehicle customers and also added Laid-up Cover for customer with trailers – all to try and support everyone’s individual needs in a difficult time.

      I encourage everyone to call and have a chat – myself and my team are here to help

      Happy Touring

      Kalen

  2. Hi Kalen
    I have just renewed my Vehicle and trailer insurance and included a $15k recovery addition to the policy
    on The Triton.
    We were planning to do the Savanna way in May this year the reason for the upgrade on the policy, we of course are now unable to travel perhaps and as such might not be able to travel at all for some time.
    My question is can the Recovery insurance be transferred to next years policy?
    Thanks Russell
    Policy no 4X43070089

    1. G’day Russell,

      It can’t be transferred, but given your changing plans, you can remove it and get refunded. I can get one of my team to call you based on the details in your policy if you like Russell, just say the word.

      Kal

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