Comprehensive Car Insurance

This article is not written to alarm you but we are suggesting that you double check your comprehensive car insurance to ascertain its validity if you ever need to make a claim for an accident occurring while driving students. The reason is the General Exclusions applicable to many Insurance Policies where it states varying words to the effect that a claim will not be paid if at the time of the incident you are driving for “payment or reward”.

Don’t trust that your broker or staff at your insurance company are correct if they tell you otherwise. Check for yourself. If it is written as an exclusion in your insurer’s Product Disclosure Statements (PDS),  which is usually found in the section labelled “General Exclusions to Section 1 and 2”, then you ARE NOT COVERED if the accident occurs while driving students.

Many operators have been absolutely assured either verbally or have had the complete disclosure of their job description written on their policy and appear on the insurer’s computer screen. This is only a validation of your disclosure; they are not liable to pay your claim if your policy has this exclusion written in their PDS.

This can be applicable to either private or business insurance. An example of this is the current policy wording for NRMA where this exclusion is NOT apparent in their basic comprehensive insurance, but it IS written in their Motor Fleet and Commercial Product Disclosure Statements.

We have supplied below some extracts from the PDS of a variety of insurance companies. NOTE: The following extracts were taken from the PDS available on their websites in January 2013. It is up to the user of this site to check its current standing with the insurer.

If you find your Insurer includes this clause in their exclusions it may be that you will either need to have them write a policy unique to you as a driver for AST or find a company that DOES include this cover. If you have any difficulty please ring the Association for more information on 0498 044 660.

Note: If you have employees who use their own vehicle and you pay them an allowance then this exclusion would generally not apply to them.

To explain why it is considered more risky for an insurer to cover an owner/driver than it is to cover an employee/driver would mean understanding the bizarre minds Insurance Underwriters.

We will not pay your claim if your vehicle is:-

AAMI (Page 19)

being used for hire or reward.

being used during your full-time, part-time or casual working period as an integral means of earning an income, unless you have told us about this use and we have agreed in writing to cover it – see ‘Use’ page 49

ALLIANZ (Page 24)

being used to carry passengers for hire, fare or reward except under a private pooling arrangement. If your full-time employer pays you a travelling allowance, we will not consider  such an allowance as hire, fare or reward.

APIA (Page 23)

Your car was being used to carry passengers for hire or reward.

CGU (Page 27)

– carrying passengers and you, a nominated driver or an authorized driver get paid for doing so (this does not include a private transport pooling arrangement, or if your employer pays you a travel allowance)

CGU Commercial (Page 16)

2.1     Carrying passengers for payment.

GIO (Page 42)

your vehicle is being used for hire, fare or monetary reward but we will provide cover if your  vehicle was being used in a car pool or child care arrangement

COLES (Page 34)

Hire, fare or reward

We do not cover your car being used to carry goods or passengers for hire, fare or reward, other than under a private pooling arrangement – unless your full time employer pays you a travelling allowance.

Lumley Motor Fleet (Page 14)

(c)    for carrying passengers for hire or reward other than under a private pooling      arrangement.

Lumley Commercial (Page 21)

(F3)  for carrying passengers for hire or reward other than under a private pooling arrangement;

QBE (Page 29)

 

Being used for carrying passengers for hire, fare or reward but this does not apply to car pooling. EG.Using your vehicle as a taxi.

NRMA Motor Fleet (Page 19)

(11) Hire Vehicle

when the vehicle is:

(a) used for carrying passengers for hire or reward, other than under a private pooling arrangement;

NRMA Commercial (Page 16)

(8) Hire Vehicle

We will not pay for loss, destruction or damage to the vehicle, or the incurring of a liability at a time when the vehicle is being used in the course of the business of carrying passengers for hire or reward, or let on hire by you as the lessor.

Zurich Motor (Page 12)

Hire, fare or reward

For loss or damage that occurs or liability which is incurred, when your vehicle is being used for the conveyance of passengers for hire, fare or reward other than under a private pooling arrangement.

This exclusion will not apply to any allowance for travelling paid by you to an employee.

Zurich Motor Fleet (Page 16)

Hire, fare or reward

If at the time of the loss or damage or when any liability was incurred, your vehicle was being used for the conveyance of passengers for hire, fare, or reward, other than under a private pooling arrangement.

This exclusion will not apply to any allowance for travelling paid by you to an employee.

———————————————————————–

The above are only a small selection of Insurers but it is enough to give you the idea of how common the exclusion is.

Personal Experience when cancelling current insurance – no offer of a refund but you do get a sheepish apology.

Not good enough I say. These Insurers happily take your money even after you have disclosed to them what you do. If they can’t train their staff enough to understand their company’s policy in these matters when instigating a new insurance then they should be liable in the future to pay out on any incident.

Problem is – Insurance companies are a bit like Government Departments – you just can’t fight em.

 

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