Everything You Need to Know About the New Water Excess

Thank you to everyone who read and commented on our blog post last week regarding the changes to our water excess. 169 comments as well as various Facebook messages, forum posts and phone calls definitely kept me …

Club 4X4 Insurance
Mar 14 2018

Thank you to everyone who read and commented on our blog post last week regarding the changes to our water excess. 169 comments as well as various Facebook messages, forum posts and phone calls definitely kept me busy last week, but it meant that you all were engaging with it.

As I wrote in one forum post – I don’t go around with my head in the sand; I know what many people think about insurance companies.

I’ve always tried to keep a really transparent approach and listen to feedback – which is why I wanted to follow-up last week’s release with this second, FAQ style post to help dispel any myths and also put together all the great questions and comments we’ve had, clearly answered in one place.

When are you going to release the new wording?

Well – the truth is there is no new wording. We have not changed what we are covering for, that means the wording does not change. But, for those who really want to examine things with a fine tooth comb (and good on you for doing so!) you will now find the below words on your renewal or new business Certificate Of Insurance (COI).

Water Crossing Excess: 5% of the Total Sum Insured, with a minimum of $2,000This excess will apply where loss or damage arises from the vehicle being driven through any man-made or natural body of water.

What if my car gets water damaged in a storm or flood?

This excess ONLY applies to claims made as a result of damage incurred by driving through a man-made or natural body of water. Driving through it means you are making a premeditated decision to drive through that body of water to get to the other side. Water damage as a result of storms or floods are covered as per normal and not susceptible to this new excess structure.

What if I’m driving down the road and scome across water over the road and cannot stop in time to avoid entering?

This is not a pre-meditated decision to drive into the water. A few people used a video share on social media recently that showed a driver who encountered flooding on a country road speed and failed to brake in time. Ultimately the rig had water ingress and hit a tree which luckily prevented him from floating away in the floodwater. This is an accident – there was no premeditated decision and as such the excess will not apply.

What if I have taken all of the precautions required to conduct a crossing? Do I have to pay the excess and if so, how unfair is that?

The answer to the question is yes. This is an excess that will be imposed whenever you damage your vehicle driving through water, where you made the decision to do so. Unfortunately, sometimes, despite your best laid plans, things don’t go the way you want them too. However, if you have any uncertainty on whether you can make it out the other side successfully, then perhaps as the driver you should consider whether you really need to make the crossing or not. Ultimately the decision to drive through water is just that, a decision.

What if there is a life and death situation and I have to go through the water?

The excess will apply if you damage your vehicle. Perhaps the better idea would be to use your EPIRB or Sat Phone to call for help. If the situation is so dire that you cannot take the responsible steps to check what you’re doing and make a measured decision, flooding your car and being stuck in water a foot above your sill line isn’t going to help with the emergency.

This is just one huge cash grab – Club 4X4 has changed.

As per the original article, there were 3 options presented to us to mediate this situation.

  1. Remove coverage for water crossing claims
  2. Lift premiums for everyone to cover the ones who claim
  3. Impose a larger excess for those who do claim. Option two was the cash grab! And we chose not to take it because we deemed it to be unfair. Ultimately the decision to go into a crossing is that of the driver. If you’re unsure, wait it out or don’t go through!

*insert random vanilla insurer name* wont charge me an excess that big – I’ll be going back to them!

Not at the moment they won’t, but you want to make sure they would cover such an in the first place. If they do, check how much they would cover you for – will they increase your sum insured to extend to your modifications and accessories the way we do? Remember, we are not reducing your coverage and we are choosing not to increase everyone’s premiums to cover this risk. All we are doing is increasing the excess for those claims that are based on a failed crossing of a body of water. You may never have one of these claims – ever!

Club 4X4 is penalising the poor with this excess

The point of the combination of flat and % is to ensure the excess provides a sliding scale coverage for the total risk on a policy. Remembering that it’s not uncommon for vehicles in our portfolio to be insured for 1 or 2 times their street value – ultimately to get that sort of cover there are going to be differences. With reference to penalising the poor, we don’t see it that way at all – if you cannot afford the excess then perhaps more consideration should be given to your actions. The difference could be that you’re totally on your own and get paid nothing for the damage.

What’s next? An excess for rolling your truck, or driving off-road!?!?

Nothing else is planned at the moment, but our commitment is to have a valuable product that offers a much higher grade of coverage than what is available in the rest of the market. In order to do this, we need to ensure that our products are viable and sustainable. If things change in the future, the commitment is to talk about it with the same openness and transparency that we have practised here.

These were the main questions – hopefully this has helped clear a few things up. Now you have the truth in writing, so you can share it with others.

Feel free to add your comments below!

Club 4X4 Insurance