21 December 2015
For a smoother summer road trip, the Insurance & Financial Services Ombudsman Scheme (“IFSO Scheme”) has released tips to help you avoid holiday mishaps resulting in declined insurance claims.
“It’s a busy time of year but, doing a few things before you leave could make the difference if something does go wrong,” says Insurance & Financial Services Ombudsman, Karen Stevens. Links to IFSO Scheme complaints are provided below.
Contents insurance tips
1. Renew your insurance
Make sure you are up to date with your payments, so your policy doesn’t lapse while you are away. If you have not paid your premiums, your policy can lapse and you won’t be covered for anything after that date.
2. Lock your house and close the windows
Double check that your house and garage are locked, as most policies exclude cover for theft from unlocked premises.
3. Let neighbours know you’re going away
Taking “reasonable care” is a standard obligation on every person insured under a policy. Let your neighbours know you’re away and leave sensor lights on. Also try not to advertise you’re away, including social media and phone messages.
4. Lock your valuables away, including if people are staying in your house
Take care if you have people staying in your home while you’re away, as “theft by people lawfully at the house” won’t be covered. “We’ve seen cases involving open homes, trades people, and people staying in someone else’s home, where claims for theft by people lawfully at the house have been declined,” says Karen.
5. ‘Lock it or lose it’ on your road trip
24 incidents of theft from cars over one weekend in Wellington was a wake-up call for insurance customers. Leaving your car unlocked, windows down, or your belongings visible are grounds for insurers to decline a claim due to the insured failing to take reasonable care.
6. Watch for “gradual damage” in vacant properties
If you arrive at your bach and discover water damage that happened before you arrived, it is unlikely to be covered by insurance. House insurance policies provide cover for sudden or accidental damage, and exclude “gradual damage”, including wear and tear, rot or corrosion and gradual deterioration, such as gradual water damage from a leaking hot water cylinder.
Vehicle insurance
1. Check car, warrant, tyres
25% of complaints to the IFSO Scheme and 39% of complaint enquiries relate to vehicle insurance. There are measures you can take to ensure you are protected, should an accident occur. Make sure your car has a warrant, but go further than that and check the general safety and road-worthiness of your car, including the tyres. “Claims can be declined after an accident, because the car was considered to be unsafe or un-roadworthy – even if it had a current warrant of fitness,” says Karen. Tyres with a low tread, for example, can contribute to accidents; an insurer can decline a claim if the car is in any way unwarrantable at the time of the accident”.
2. Drive carefully and safely, and comply with your licence conditions
If you are driving “in breach” of your licence, you won’t be covered if an accident occurs under any circumstances. “Parents often end up paying for the damage, not only to their own car, but to another car or property, if they allow their son or daughter to drive outside their licence conditions and an accident occurs,” says Karen. Common breaches include: driving with passengers on a learner or restricted driver’s licence, or driving between 10pm and 5am on restricted driver’s licence, without a supervisor in the car.
3. Take note of alcohol limits
There are insurance, as well as legal, consequences for driving over the limit. “Be aware of the new alcohol limits,” says Karen. “In a recent case, the claimant was found to be over the limit of 250 micrograms of alcohol per litre of breath, but under the old limit of 400 micrograms. He argued that, as he was under the legal limit at the date of policy renewal, he should have insurance cover. But the legal limit was the limit which applied at the time of the accident, not the policy renewal, and he had no cover for the damage to his car.”
Remember: take care and ensure you have a happy holiday!
See our overseas travel tips, and info sheets on reasonable care, gradual damage, vehicle insurance, and breach of licence conditions.