When am I not covered – Issue 4

One of the things we get asked all the time at Club meets, shows, on the phone and online is, “What am I not covered for?” Over the next few weeks, we will be compiling a series of short articles to help you understand a bit more about the exclusions in your Product Disclosure Statement (PDS).

Please be aware, these articles focus on the major issues and should not be viewed as a substitute for appropriately looking through your PDS before deciding to take up coverage with Club 4X4.

This time around we will focus on the physical deterioration of your vehicle. This is fairly standard amongst the vehicle policies on the market, but it’s something that’s still important to have a sound understanding of. What we discuss in this article can be referenced back to page 19 of our PDS.

Here are some more key areas to familiarise yourself with upon quoting and purchasing a comprehensive motor vehicle policy with Club 4×4:

Physical Deterioration of your vehicle

This is an area of motor insurance that is commonly misunderstood among people. It links back to the notion that your policy provides coverage mainly for unforeseeable circumstances that cause damage to your vehicle. These include but are not limited to collisions, accident, fire, theft, malicious damage and weather events. Physical deterioration in layman’s terms means “wear and tear”, and is therefore not covered.

It’s an important callout that this set of exclusions is mirrored across many if not all Motor Insurance PDS’ you will come across in Australia.

Structural, mechanical or electrical failure/ breakdown

This refers to wear and tear of structural, mechanical or electrical components, which lead to break down. For example, GU Patrols can wind up with cracks in the rear spring tower tops after they have undergone a suspension lift. This is a structural issue as opposed to an insured event, and will not be covered under your motor policy. Another example is the chassis bending or cracking in many dual cabs due to overloading. Again, the damage falls back to undue strain placed on the chassis and therefore would not be covered.

Deterioration, wear, tear, rust, corrosion or depreciation

This refers to something that has happened gradually over time and not from one incident. For example, if you have just finished your third Cape trip (lucky you!) and you arrive home to discover you have worn out your ball joints, that falls under the wear and tear scenario, and hence will not be covered.

The cost of fixing faulty repairs or repairs to old damage

This one is a little more self-explanatory. Basically, we will not cover the cost of rectifying repairs from work done before you were insured with us, along with any repair work done outside of the claims process (repairs not authorised by us). An example might be where we are repairing a panel that had seen sub-standard repairs in the past. The process of repairing this panel might necessitate extra work to bring it up to standard for a warrantable repair. In this case we may ask you to contribute to the cost.

Remember, most insurers wave around the “lifetime repair guarantee” concept as part of forcing you to go to their repairer, so not all is lost – you could go back to them with the issues. This doesn’t happen very often, but is in most if not all motor insurance PDS’ you’ll come across.

Damage to tyres by application of brakes or by road punctures, cuts or bursts

Damage to tyres is a common exclusion in the Australian motor insurance industry. This is due to the fact that tyres are consumable items with a lifespan much shorter than most other parts on your rig. As such, they will not be factored as a claimable item.

Loss or damage by mildew, moth, vermin, insects, domestic pets, any process of dyeing or renovating, the action of light or atmospheric conditions

Again, there is not too much left to the imagination with this point. When we refer to light and atmospheric conditions for example, we are talking about the effects that the atmosphere has on your vehicle. Most commonly; the way it interacts with paint, which often causes issues such as fading clear coat. This can be an expensive fix, so it is important to be aware of this exclusion so that preventative measures can be taken into account.

Loss or damage to your vehicle caused by:

  • Cleaning, restoring, modifying or repairing your vehicle. If you use a fire hose to rinse the suds off our rig; leaving it nice and clean but dented, unfortunately you are on your own! Seriously though, any damage caused directly by the activities listed above will not be covered.
  • Faulty design, specification, materials, repairs or workmanship. This refers to manufacturing faults and problems with repairs done outside of our claims process- again not covered.
  • The use or application of vehicle parts of accessories that do not meet manufacturers specifications. As mentioned above, this is a generalist exclusion that appears on most motor policies and finds itself in our PDS also. Interestingly, a point to consider is that technically most modifications that are done to your vehicle will naturally be outside of the manufacturers specifications; this can mean anything from new wheels and tyres to a full dual cab conversion. However, we also know that many of these modifications are legal despite manufacturers specifications, with only some of them needing engineering certificates depending on the type of work done. We have communicated about our stance on modifications in the past and you can read it here. To put it simply, if the modification/ accessory was illegal and contributed to the event, we may look at declining the claim based on this factor.

 

Click here to read previous issue

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Comments 3

  1. Pingback: When am I not covered - Issue 5 - CLUB 4X4

  2. Rob Kriek

    Hi there,
    So if I undertake a river crossing, have installed a snorkel, used a bra for the front and I misjudged the water depth and subsequently drown my diesel engine by sucking water into the air filter box + inside cab space; what wear and tear allowance will you make to replace the engine and all the electronic components if the vehicle has done 150,000-200,000 kilometres?
    Cheers
    Rob

    1. Post
      Author
      Kalen

      Hi Rob,

      Really really good question, thanks for that.

      Ultimately what we need to determine is whether or not the vehicle is repairable. This will come down to financial but also regulatory and safety based considerations.

      If we have decided to total loss the vehicle, then you will get paid out whatever is on your certificate of insurance.

      If it’s an agreed value on the vehicle you get what’s noted, if it’s a market value we are guided by Redbook market values and other current market considerations. Don’t forget, if you’ve nominated an amount for your modifications and accessories that amount will be paid as well.

      If we determined that it is reasonable to repair, we would be looking to reinstate the vehicle to a condition as close to what it was before the event as possible. It’s important to note that if the vehicle is under warranty you always get OEM parts. Anything out of warranty we will use the most appropriate part for the fix and this will recognise the overall condition of the vehicle.

      Hoping that makes sense

      Happy Touring

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