Blog Comment: The journey or the destination? A guide to unsealed-road safety

Hi Kalen
I read your blog on the trip to the Birdsville Bash (with some envy mind you) and your raise some very valid and useful points.
It got me thinking about other aspects, especially how it relates to the vehicle and insurance. As a long term visitor to EO I would hazard a guess that insurance questions in the forum are amongst the most frequent.
One that appears to cause confusion is the “where am I covered”. Now most PDS are quite clear, especially when they say anywhere in Australia you are entitled to be. It would be good to hear from the industry in clear concise language as many appear to be hesitant on the meaning of the PDS.
The other that is always of interest to me, is modifications to vehicles. Many modifications, if not most, usually require an engineer’s sign-off under State regulations. Even items such as the addition of auxiliary fuel tanks, tyre sizes, suspension changes.
It would be good to hear an insurer’s perspective on this and the approach taken if someone is making a claim on a vehicle where the modification has not been certified, therefore making it technically un-roadworthy.
And for sure, no one situation will be the same as the next, but I feel a high level overview from someone in the industry would be welcomed by many, especially those blissfully unaware of the implications…
Cheers, Baz – The Landy
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Reply By: Club 4x4 Pty Ltd - Monday, Aug 15, 2016 at 13:33

Monday, Aug 15, 2016 at 13:33
G'day Baz - good to her from you again.

Good points - let me just clarify if i may what you're asking for.

1) Clarity on the "where you are covered" piece
2) Clarity on the "what kind of mods are covered" piece.

Further to this, are you looking for a generalist view, or Club 4X4's view?

Let me know


AnswerID: 603419

Follow Up By: Baz - The Landy - Monday, Aug 15, 2016 at 16:27

Monday, Aug 15, 2016 at 16:27
On the first point, it often comes up in discussion “what does anywhere in Australia mean” – it seems fairly straight forward, but many look for insurers to clarify this further, which seems counter-productive. Perhaps you could spell it out from an insurance company perspective.

My second point is around modifications that require an engineer’s sign-off, and many would be surprised what does need to be signed off, but which are not. What is the stance taken by insurers’ if a claim is made and it is found the vehicle has mods that are not approved as most (all) PDS say that vehicles must be roadworthy, do unapproved mods affect this?

All very general and high level, as every case is bound to be different.


FollowupID: 873045

Follow Up By: Club 4x4 Pty Ltd - Tuesday, Aug 16, 2016 at 08:40

Tuesday, Aug 16, 2016 at 08:40
Ok Baz, i do understand what you're getting at now - thanks for clarifying.

Also Ken, thanks for your response - very well put points there, some which i will echo.

The important thing here is that i cannot talk on behalf of the industry. Yes, over 20 years of industry experience gives me a 30,000 ft view, but for many reasons, not least the possibility of providing incorrect information, i will focus my response purely on Club 4X4.

Geographical Coverage

When this product was going through its design phase many moons ago, one of the customer needs we were responding to was the "unknowns" in the insurance offering's that were available for off-road enthusiasts at the time. One that kept coming up was "Where am i covered?... What about on the beach?... How about river crossings?".

The idea of claiming to be an insurance provider targeting off-road enthusiasts that doesn't cover these scenario's was never one that was going to get past our mandate to make things easy and clear.

So to break this down and provide further clarity:

Where you are covered
* Anywhere - gazetted, non gazetted, beating your own path through the scrub, river crossings, beach, desert - anywhere that is classified Australian land

Where is your coverage at jeopardy?
* Being involved in or conducting illegal activity of any type. This includes trespassing, disobeying road closure signs (be it a closed track, or river crossing or anything else) or any other form of illegal activity.

Modification Coverage

Another key need we wanted to respond to was the provision of appropriate coverage given the significant investment we all make into our vehicles.

There were two challenges we faced, the first being the amount invested and how it would be factored into the underwriting process, the second being legality.

1) Investment - It's not uncommon nowadays for the insured modification/accessory component of a vehicle's insurance coverage to meet or surpass the value of the vehicle itself. Many a well setup 80 series Landcruiser will have a modification value that is in the multiples of the vehicle's value. This presents a significant challenge as an insurance provider, as ultimately our recoverable amount in the worst case scenario is a salvage value which places little to no value on the modification components at all.

Nevertheless we pushed on and in most cases we can accommodate the requirement of the customer. Sometimes we will factor in depreciation, or impose special excesses and the like to try and provide an equitable situation and in most cases where the value exceeds various thresholds we will require photos and a detailed list of modifications with values. This is quite prominent online and the reason why sometimes the system will not allow you to continue your quotation without underwriter interaction of some description

2) Legality - Whilst there is significant experience and capability in the team regarding the various state based legalities, to have appropriate coverage across every rule and enforcing it during the quoting process was deemed unfeasible and unreliable. Furthermore, it would mean as an insurer we were providing advice around these state based laws, a position that we didn't think was appropriate for an insurance provider.

As such, our stance on modifications was simplified. We will cover you for the financial component you desire, within the various internal processes we employ. However, in terms of legality, the onus is purely on the owner of the vehicle. This means that the owner must abide by the legalities imposed by the state based legislation applicable to the vehicle registration.

The implication of this is that should it be found at claim time, that an illegal modification or accessory added to the vehicle was contributory to the claim itself, the claim may be reduced or refused. Our target market is the tourer, as such i don't feel that this sort of scenario will be common, but it's an important thing to consider when planning your modifications.

Finally Ken, having worked with brokers and broker models for a significant chunk of my career, there is definitely a place for them. In my opinion, moreso in the commercial insurance space where coverage's and insured items are varied and significant. I would be reticent however to recommend a broker to give certainty on the legalities of a motor vehicle under the various state laws.

I think this is fraught with danger and i would feel uncomfortable if i didn't state that in this thread.

Great discussion guys, keep it coming
FollowupID: 873051

Follow Up By: Baz - The Landy - Tuesday, Aug 16, 2016 at 09:02

Tuesday, Aug 16, 2016 at 09:02
Hi Kalen

Thanks for taking the time to produce a comprehensive response.

On the modifications, that is what I was driving at. And in line with my own understanding it is the applicant's responsibility to ensure the vehicle complies with the State based registration requirements, and non compliance may have a roadworthy question mark on it.

But your point is noted, and similar to Ken and my own understanding, the underwriter may still honour a claim, however if the non-certified mod was a contributing factor this could give rise to a reduction in payout or refusal to meet a claim.

This can be a grey area that many should be aware of, but possibly overlook...

Cheers, Baz

FollowupID: 873052

Follow Up By: Club 4x4 Pty Ltd - Tuesday, Aug 16, 2016 at 12:36

Tuesday, Aug 16, 2016 at 12:36
A pleasure Baz - these are all great points that are very important to all of us as enthusiasts so i thank you for asking them.

I wish i had more time to spend on the forums to be able to help shine more light on insurance questions and issues - more than happy to be directed to them by anyone at any time.
FollowupID: 873056

Reply By: Kenell - Monday, Aug 15, 2016 at 20:44

Monday, Aug 15, 2016 at 20:44
I am not responding on behalf of the insurance industry nor any insurer but I do have some experience in the field. I am also not a broker and I have no affiliation with any brokers.

The problem with the questions you are asking is that the answers will vary between insurers. An industry response is unlikely on this basis. There are also qualifications to answers e.g. geographical limitations = Anywhere in Australia (commonly). This means what it says BUT if you are contemplating entering a river where there are signs warning about dangers and depths etc and you go in anyway your insurer might well find an exclusion. Driving across private land, or over terrain that proves to be more challenging than anticipated on the other hand is unlikely to result in a declined claim if an accident occurred. The insured has an onus to take precautions to avoid losses but in my experience the circumstances need to be pretty obvious before insurers venture into this space.

The modifications question needs to be considered on 2 fronts. Firstly that an insured is covered for the mods if a loss occurs i.e. the value is included.The second consideration is the contribution towards improving performance. The best position is to tell the insurer and get acknowledgement.

Roadworthiness is a seldom used exclusion by insurers despite the consideration that many on this forum have to the contrary. The insurer can only decline a claim if the accident was contributed to by the un roadworthiness. I note that 4x4 Insurance underwriter Hollards considers this onus rests with the insured but I doubt the enforceability of that position.

The best advice I can give for 4 wd enthusiasts - those of us who travel remotely, modify our vehicles extensively, carry / tow heavier weight than normal vehicles etc is to seek out an intermediary such as a broker and tell him/her the things that concern us and get advice in writing. I realise that the end result of buying insurance this way will probably be more expensive than many options on the web but a good night's sleep is worth the difference in $$.

Insurers are not unreasonable in the main and most go to lengths to get it right in my experience.

AnswerID: 603431

Follow Up By: Baz - The Landy - Tuesday, Aug 16, 2016 at 07:53

Tuesday, Aug 16, 2016 at 07:53
Thanks Ken.

Insurance is an interesting topic and I find commentary is often based on myth rather than fact. And whilst one can only generalise as all situations will be different, knowledgeable commentary will hopefully help correct that.

Cheers, Baz
FollowupID: 873050

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