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
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