Double Indemnity?

Submitted: Saturday, Nov 18, 2017 at 22:28
ThreadID: 135882 Views:2309 Replies:2 FollowUps:1
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There has been quite a bit of interest in the policy offerings of Club 4x4 Insurance, particularly in their upgradable vehicle recovery benefits. I am sure that a lot of their policy holders, including myself, also have RACV (or equivalent) Total Care, which is also an insurance against breakdown recovery costs. So, is this a form of double indemnity which in itself is against the law & could open a can of worms as to which company is liable for the recovery, maybe neither?

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Reply By: Motherhen - Saturday, Nov 18, 2017 at 23:06

Saturday, Nov 18, 2017 at 23:06
It certainly works that way with accident insurance. But I don't think it is an issue for breakdown cover, and the one you call comes and does the job. So long as you don't claim the same accommodation costs after a breakdown from both it shouldn't be an issue. A bit like when a new car has breakdown recovery included. You still have your private motoring cover which has more in the way of extras, and in flexibility with a network of agents, rather than the lesser number of dealers for the car brand cover.

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Reply By: Allan B (Sunshine Coast) - Sunday, Nov 19, 2017 at 10:20

Sunday, Nov 19, 2017 at 10:20
Just had a word with my daughter-in-law, a commercial lawyer, about this. She said......

1) It is not "double indemnity". You are not being indemnified. Double indemnity relates to life policies where you are indemnified to receive an increased payout for certain conditions such as unexpected or accidental death, as compared to more natural circumstances.

2) There are no laws preventing you from having more than one cover for the same thing e.g. insurance plus motoring organisation. There are laws relating to making multiple claims for the same event. These laws are in the class of fraud.

3) If you have multiple cover for the same event such as vehicle recovery, then it is your choice as to which provider you elect to make or fund a recovery. You just cannot obtain an advantage from more than one for the same event.

4) Insurance companies may sometimes have policy clauses relating to multiple cover. Doing so may void the policy. Again, it is not 'illegal' to do so, merely the risk of voiding the policy or possibly attempting to defraud.
Advice was to ask your insurer or read your policy even if it is extensive and boring.


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Follow Up By: Member - J&A&KK - Sunday, Nov 19, 2017 at 11:01

Sunday, Nov 19, 2017 at 11:01

Thank you. Good advice especially point 4.

The devil is in the detail of the policy. Reading the fine print is one thing. Understanding it and it’s effects on a claim is another. However modern “plain English” policy wording and examples contained in PDS’s have made it a lot easier for the man in the street to understand.

Cheers John
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