Car insurance policies are a must for anyone with a roadworthy vehicle. It offers a certain degree of protection by ensuring you don't have to pay for damage or repairs with your own money. However, insurances don’t cover everything, and this guide will shed light on this aspect.
Your car insurance policy may not cover your car if it's not roadworthy—has a lapsed registration or in a dangerous operating condition. Policies won’t cover intoxicated, unlicensed, or unapproved drivers. Car mods, improper use, and drivers not explicitly named on the policy can also jeopardise your coverage.
This guide will help you understand some of the car insurance exclusions on most policies. In addition, you’ll learn what policies likely won’t cover, what they do cover, and whether they’ll cover drivers not named in the document.
What Are 5 Things Your Car Insurance Policy Might Not Cover?
You should always read your insurance policy's fine print and understand what it covers. Knowing what the car insurance doesn't cover is as important, so you can prepare for it or make changes to the policy.
Here are 5 things that your car insurance policy will not cover:
1. A Car That’s Not Roadworthy
First and foremost, your car insurance policy will not cover a car that’s not roadworthy in any sense of the term.
Your car might have been fine when you first got the insurance policy. But if that car becomes a hazard to other road users or if it somehow becomes deregistered, that insurance policy no longer protects the vehicle in that situation.
Remember that an active or “in force” insurance policy does not automatically mean it’ll cover your car regardless of its condition. There are clauses in the policy that will void its coverage, such as a car that loses its roadworthiness.
2. An Intoxicated, Unlicensed, Or Unapproved Driver
Your car insurance policy will not cover your vehicle if the driver, whether you or another person, is intoxicated, unlicensed, or unapproved.
For example, some people might not be approved to drive for medical reasons and if their doctor has told them not to.
Of course, being drunk or not having a valid driver’s license means you shouldn’t be operating the vehicle. If you insist on doing so, your insurance coverage won’t apply for anything that happens during that drive.
3. A Driver Not Named in the Policy
Take a closer look at your insurance policy. It identifies your vehicle and specifies the driver that the insurance covers.
Typically, the vehicle owner is the first driver covered by the insurance policy. Besides that, you can also include additional names to the policy, such as your partner or family members that you allow to drive your vehicle.
Many insurance policies will not provide coverage if the vehicle is operated by someone not named on that policy.
So, if that sounds like you, it would be an excellent idea to update your insurance coverage to include other drivers that you allow to use your vehicle. That will ensure they enjoy the same car insurance coverage as you and anyone else named on the policy.
4. A Car with Unapproved Modifications
You're the owner of your vehicle, and you can do whatever you want with it (within the bounds of law, of course). That includes any modifications and customisations that you want for the vehicle.
However, you must inform your auto insurance provider of any modifications or customisations you make to the car. Otherwise, they can choose not to cover your vehicle if you ever try to file an insurance claim.
Remember that insurance is all about risk. The insurance company takes on a certain degree of risk when they give you a policy that promises to cover your vehicle and pay for necessary repairs.
The insurance company must know all the facts about your vehicle. A modification to the car can alter the risk it poses, which means the policy must be adjusted accordingly.
For that reason, you must always notify your insurance company of any modifications you intend to make and understand its implications.
5. A Car Used Improperly
Lastly, your car insurance policy will only cover the vehicle if you use it for the proper purposes.
For example, taking a passenger car offroad will expose it to risks it’s not designed to handle. The same is true if you overload your vehicle with too much cargo or passengers.
In those cases, you’re increasing the risks you face and violating the insurance policy's terms.
Suppose something happened, and you tried to file an insurance claim. In that case, the provider has every right not to cover your vehicle or the damage it sustained.
What Does a Car Insurance Cover?
So far, we've explored the five things that a car insurance policy might not cover. It is equally important to answer the question, "What does car insurance cover?”
After all, those insurance premiums you pay aren’t cheap. So, you must understand what your money is buying you.
Firstly, remember that insurance policies are customisable to your needs. So, your insurance policy can differ from the one held by your neighbour, for example.
Still, most car insurance policies will pay for repairs and spare part replacements damaged by:
- Road accidents and collisions
- Theft, vandalism, and other forms of deliberate damage caused by others
- Natural disasters like fires, floods, storms and more
Some insurance policies also provide ‘third-party coverage’. If your insurance policy includes that feature, it’ll cover any damage you cause to other people’s vehicles and property.
That said, always remember that insurance policies are customisable or adjustable. That means you can choose to include and remove optional features, and that will affect the premiums you pay.
Simply put, the less coverage you want to be included in the policy, the less you'll pay in premiums.
Does My Car Insurance Cover Anyone Who Drives My Car?
Typically, car insurance policies will only cover drivers who are explicitly named in your policy. So, you can avoid problems by ensuring that anyone allowed to drive your car is named on the policy.
For example, you'll want to include your spouse, family members, and licensed children on the policy. That way, if the car is damaged while they're behind the wheel, you'll have a much easier time filing an insurance claim.
Car insurance is just one aspect of vehicle ownership that you’ll want to educate yourself on. For everything else, you can find helpful and informative guides on the CarpartAU. It’s updated often with plenty of information that can help you become a well-informed driver in Australia and anywhere else.
By Ray Hasbollah