4x4 insurance

I also was with club 4x4 but found that on the first year renewal they reduced the value of the vehicle substantially (agreed value ) and also raised the premium...i am now with shannons ..

Pepper, I had same problem, i had agreed value but they dropped the value 30pc to keep the premium the same. After two years the premium was up 35Pc for less value. They hook you up and see how long you swim... I do a ring around every few years just to see how my current insurance stands up though. I also have an older vehicle so I want the best deal i can get. Michael.

Excellent choice IMHO. I've been with them for around 5 years. Had a claim on a rear bumper (someone in the parking lot backed into me) and they were happy to deduct the cost they were quoted from me sourcing a steel rear bar fitted versus them replacing the plastic OEM.

In the same year (dammit), my car was stolen. While they took a good while (3 weeks to confirm written off, 2 weeks to pay-out) they delivered. And it was through Aussies who communicated and responded well.

My premium for both events went from $1000-odd to $2200-odd, but I get that. Neither my fault, but AAMI, NRMA and GIO all simply asked "how many excesses paid in the past 3 years" versus the more detailed questions from both Club 4x4 and Shannons (eg, how many excesses did you pay, and what were the excesses for...).

I have no drama's in recommending Club 4x4. Claimed on them twice, and delivered in both cases. Yes, my premiums have gone up because of it - despite no at-fault - but I can understand their position on the matter. What I would recommend, though, is that you list ALL costs associated with your 'developed' vehicle. That saved me - as the stolen car was insured for only $41K, but I had listed the $22K or thereabouts in accessories (and had either photo's and/ or receipts). Hence, they paid me out for what it was worth.

Soft roader - as your claims were no fault Club 4x4 should not have put up your premiums.

So they are not quite as good as you think.

The OP will soon learn the traps of going with Club 4x4 as many others have.

No, although I was not 'at fault' - they could not pass the excess onto another company/ person so it's marked against you. Every insurer does that, even if it isn't fair. I know this as comparable quotes from others like AAMI, GIO and NRMA - just to get my car out of the lot on the day - were even more expensive.

It was because Club (and I think Shannons does too) asks not just 'how many excesses you have paid' but goes into detail on each one (so you can state you were not 'at fault').

Love to hear what these 'traps' are. There's a few out there that don't like them - but as I say, I've been with them 5 years, have made and finalised claims, haven't had a price increase hike like everyone talks about... Far better than an experience I had with Coles Insurance in 2012... never going to a generic cheapie group like that again.

Yes have considered this and totally agree but I think public liability would require deep pockets

Hey Allan I think (hope) you forgot to add the funny face at the end of your post.

I agree the maths aren't all that complicated. Insurers make less than 10% profit on motor insurance in a good year. An average year is a positive return - but just and this year it will certainly be a significant loss.

As at yesterday sources external to the insurance coys were estimating insured losses (all classes) of up to $2b and that doesn't account for the rain that is still falling.

Self insure at your own peril.

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Hi Kenell,

In business, the terms "Profits & Losses" are impressionable but certainly do not reveal the full account of a business financial status. For a start, such terms are applied only after all costs including remuneration have been applied. If the industry was not adequately profitable then it would not remain in business.

The premiums paid by the customers of an insurance company must be adequate to cover the costs of not just the payouts but all the other significant costs. It is a simple equation that the monies paid by the customers in premiums must be significantly less than that returned as payouts.

On average, prudent drivers certainly will not break even over a lifetime. Insurance attraction provides the comfort of security. I insure only 'Third Party Property Damage' to avoid the costs of a third party claim, which can be unlikely, but ridiculously high. In more than 70 years of driving I have never had reason to claim vehicle insurance but did pay out hefty premiums in earlier days until I realised the folly.

In essence, insurance companies do not stay in business and offer cover unless they can make a profit and you pay, not just for that service. but for for their profit. If you are in dread of the consequence of car damage costs then by all means pay for the service to allay that.

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Hi Nigel,

I insure only Third Party Property Damage which covers repair to 'the-other-vehicle' should I be at fault.
The policy covers my vehicle for loss due to "fire or theft" and includes Legal Liability of $20 million.
This costs me $360 per year. A reasonable fee for the cover provided.

Have you done the same for your new bus Alan?

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Yep. Third Party Property Damage.

Hi Allan,
I respect your views on self insurance. We could debate the points you raised but fear it would bore everyone to death.

My challenge when I worked in the game was to keep motor claims down to 95% of premiums collected - not profit ie before expenses etc - purely premium against claims. It is not very profitable and if it wasn't for the other classes, some insurers would happily walk away from it.

Good luck with your choice and I hope it continues to work for you.

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Thanks Kenell, I do understand the arbitrary differential between claims and premiums, and to a casual eye your nominated differential looks reasonable, but the Devil is in the detail.
That 5% may appear to be a small price to pay for an average person, but the problem is that there are many drivers beyond the average whose poor behaviour pushes up the claims and hence premiums. Accordingly, the careful drivers are funding this inflation and having to pay higher premiums.

Simple mathematics tell us that for the industry to stay afloat, their income in premiums must be greater than their costs (claims plus administration and profit) so even if everyone was absolutely 'average' they must pay significantly more than they would ever receive. And if you are 'better than average' then you are paying dearly for the service.

It's mostly the luck of the draw if you can get away without being insured you never know what'll happen around the corner just look at what's going on with the current weather and how many thousands of people were caught out. I've always been insured since I bought my 1st car in 1985 and have been payed in excess of 40k of the top of my head added up from different events plus been towed and been given a replacement vehicle a few times plus whatever legal fees that may e involved. I`m probably in front and wouldn't take the risk of being uninsured. On the other hand my father who is 80 has never had to make a claim.

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Well, there you go Batt's. Like your father, I have never had reason to make a claim in more than 70 years of driving. But I don't consider that to be "luck of the draw".

I think if you're still paying off the car with a lender then they require it to be insured comprehensively.

As at yesterday there had been 60,000 claims lodged from Qld & NSW as a result of the floods / storms. Approx 11,000 of those were for motor vehicles.

The insurers have to tow the vehicles, have them assessed, repair them if possible or dispose of the wrecks if not, warrant the repairs for the life of the vehicle and get them back to the customers.

Because of supply chain issues and availability of repair facilities many will probably be written off when they could have been repaired in "normal" times. The lifetime warranty is often the tipping point.

Think I'll keep paying my premiums for a while yet.

Alan I get where your coming from and it is a fair gamble if you are in a financial position to underwrite yourself
Just out of curiosity do you hold the same view with health and home/ contents insurance ?

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Hi Alby,
As you say, "it is a fair gamble" although I would rather put it as "assessing the odds".
Our home/contents is insured for the lowest value we could arrange. It was necessary to take home/contents in order to obtain Legal Liability cover (of $20M). Again, it was assessed on the basis of risk/cost.
We do have Private Health cover as, with advancing years, the probability and costs of health medicals increase significantly. It has been proven to be a good decision.

I’m with Kennell, and I have a background of trading financial market products for a major financial institution, so have a good appreciation of risk/reward.

The problem with self-insuring is that your spread of risk is (usually) just one vehicle. So, to save say $1,200 or whatever it is, you are risking the value of your vehicle. Perhaps there might be an argument to be made if your vehicle is worth say $5,000 for just having third-party property insurance. Although, you’d need to compare the difference between third party vs comprehensive insurance to determine whether there is much value in taking that approach in any case.

But given people spend a small fortune on vehicles these days, potentially your risk reward is a loss of let’s say $50,000 for a payout of $1,200 if your vehicle is a write-off.

An insurance company’s risk is a portfolio approach, the risk is spread over thousands of policies.

And for sure, you could argue that over-time you get a buffer from premiums saved, but if in year one you write off a $50,000 vehicle for a $1,200 premium saving, it will take somewhere around 30 years to recoup that loss even allowing for compounding of interest.

You’re placing a $50,000 bet for a $1,200 payout – not good odds in my opinion.

Insurance, you never need it, till you need it…!

Cheer’s, Baz – The Landy

You're heading into the realm of the debate I have refrained from developing.

I calculate the worth of my insurance by calculating it as a percentage of the value of the car. My current policy has a total replacement clause so regardless of the age, if my car is stolen or written off, I get a new one. I calculate the premium to be around 1.3% of that cost.

I consider the convenience of being able to pass the problem to someone else if an accident happens to be worth the premium in itself. That convenience is exacerbated if the accident happens in a remote location.

Anyway I am preaching to the converted.

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Baz, your argument is based on an example of a $50,000 asset and an insurance premium of $1,200.
Trouble is that the $1,200 repeats, year after year. And you are only considering a loss by "write-off" whereas most people are regularly claiming for minor damage.

Write-off is most likely caused by theft or fire and my cheap(er) Third Party Property Damage policy covers that. Major damage by traffic accident is only my cost if I were at fault which has not occurred in 70 years of driving so if it did happen as my fault then I would deserve it. If it were minor damage of my lousy driving then I would either pay for repair or simply ignore it. I do not 'worship' my vehicles, rarely even wash them!

As for your "placing a $50,000 bet for a $1,200 payout", I think you have that the wrong way around...... you are punting $1,200 on a $50,000 payout each year with what expectation of collecting? In my case an outgoing of $84,000 without collecting one cent!!! Besides, it would only be $50,000 in the first year with decreasing returns each year as the vehicle depreciates.

You cannot escape the reality that an insurance company must obtain an income (customer premiums) that at least equal their pay-outs plus their operating costs.

"In my case an outgoing of $84,000 without collecting one cent!!! ..."

Ah, the benefit of hindsight, it's as wonderful thing. And I'm pleased you've never needed to call on insurance...

But you re right, perhaps I am punting $1,200 on a $50,000 pay-out; you're punting $50,000 on a $1,200 pay-out - I don't have it the wrong way around, it is just that my reward versus risk is way better than your's. And that is what insurance is all about - what is my risk and how much will it cost me to pass that risk to someone else to manage.

And once again highlighting, insurance companies have a portfolio approach, something you can't achieve with just one vehicle, your spread of risk is concentrated on that one vehicle.

I'm comfortable with the arguments I put...

Cheers, Baz - The Landy

Not to labour the point Allan, but I perceive 2 flaws in your arguments.

I haven't seen recent stats (last 4 years) but I think you will find accidents still cause more write offs than thefts or fires. In fact storms, floods and hail probably exceed thefts now. In the Melb hail events (2 in close succession) around 10 years ago 50,000 cars were written off.

If you are not at fault in an accident your chances of recovering against a negligent third party are often slim. Apart from the obvious "he said / she said" you have the uninsured (imagine that !!), the unlicensed, the stolen, and the drug/ alcohol issues to deal with. You can try the legal process but lawyers make more money than even the insurance companies and at the end you can't get blood out of a stone.

Good points Kenell but the Aurion is now 8 years old and worth less than $10k.
Still looks and drives like the day I bought it. Hasn't had a spanner laid on it so it's a keeper.
No insurance company would would offer 'Total Replacement' on it but would still want $1000 p.a. for 'Market Value' so not good odds in my view.

But certainly, the "uninsured, stolen, drug' issues are a worry. Your'e making me nervous. lol

Ahhh - if the car is worth less than $10k then I agree. TPF&T is a valid consideration.

The replacement policy is only available on new cars and it costs a bit more but it works for me.

I have met people in remote places who have had an accident and the predicament they would have been in without insurance has been enough to convince me.

I have enjoyed the respectful discussion.

Safe travels mate.

Ken

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Ken, maybe the discussion stayed "respectful" only because we were not discussing batteries?
It is also easier to consider options such as I was proposing if you are in a secure position.
Maybe when I get my Mercedes Benz G-Wagon I'll get full cover? LOL

May neither of us need to call "Claims".

Had a look at 3rd party on the 100 series this time around Allan. About a third of the cost . Big savings but then Murphy turned up so I had to bite the bullet and hit the pay button. Think you might need deep pockets
for the Benz. :)
Dave.

DGA Insurance Brokers perhaps???