22 December 2016
It is smart to take stock before the holiday season, and take steps to ensure you are insured, should anything go wrong.
“It’s a busy and festive time of year,” says Insurance & Financial Services Ombudsman Karen Stevens. “But taking a few moments can help you avoid unexpected incidents becoming holiday nightmares. Many of the more common complaints we deal with could have been avoided if people checked their insurance policies, and took a few steps before going on holiday.”
Understand your insurance policies:
1. Read your insurance policy. If you don’t understand what you are, and are not, covered for, ask your insurer.
2. Take note of policy exclusions and limitations (e.g. pre-existing health conditions, gradual water damage, mechanical damage to your car – these things are usually not covered, unless you have arranged extended or specific cover).
3. Look out for anything you need to do under the policy (e.g. lock your house and car, tell your neighbours you’re going away, turn on your alarm if you have one, don’t leave valuable items visible in your car, report stolen items immediately, give your insurer accurate information).
Check your house insurance sum insured:
1. Check that the amount you are insuring your house for will be enough to rebuild it in the event of a disaster. Recent earthquakes were an acute reminder to do so.
2. Check that the square meterage of your home and other buildings on your property are recorded accurately.
3. Check that additional features of your home have been identified. This includes fences, driveways, garages, sleep-outs, sheds, retaining walls and swimming pools.
4. Answer the questions on your insurer’s online calculator.
5. Ask a builder or quantity surveyor for their expert advice.
Prepare for road trips:
1. Check your car before you travel. Make sure your car has a warrant, and check its “road-worthiness”, including the tyres. Claims can be declined because the car is unsafe or not roadworthy – even if it had a warrant (e.g. tyres with a low tread can contribute to accidents.
2. Drive carefully. This is the most important tip for many reasons. Insurance doesn’t cover damage caused by reckless driving.
3. "Lock it or lose it". If you fail to take reasonable care by leaving your car unlocked, windows down, or your handbag or valuables visible, insurers can decline a claim.
4. Comply with your driver’s licence conditions. Driving “in breach” of your licence is grounds to decline a claim. Parents often end up paying for the damage to their own and another car, if they allow teenagers to drive outside their learner or restricted driver’s licence conditions and an accident occurs.
5. Take note of new alcohol driving limits. There are insurance, as well as legal, consequences for driving over the limit. If you’re over the limit and an accident happens, you won’t be covered.
Before you travel overseas:
1. Check your insurance policy. Travel insurance is often purchased online, through a travel agent, or comes at no cost as a credit card benefit. It is important to get a copy of your policy and read it. Limitations on credit card insurance, such as time limits and age restrictions, catch people out.
2. Tell your travel insurer about your health conditions. Tell your insurer about all health conditions and symptoms you know about. Most often, you will not be covered for any pre-existing conditions, unless the insurer has accepted them in writing and charged an extra premium. Sometimes, there will simply be no cover available.
3. Take care of your valuables and bags. Taking reasonable care is a standard insurance requirement. Most insurance policies specifically exclude cover for personal items left unattended in a public place. This can include beaches, backpacker hostels and airports.
4. Wear jewellery or keep it in a safe. Insurance policies will often have specific conditions for valuable items. Many claims have been declined because jewellery was stolen or lost when it was not “worn or carried” on the person, as required under the policy.
5. Report incidents immediately. Contact the police and your insurer as soon as you can. Travel policies will specify the required timeframe, and usually provide an emergency helpline. Often insurers will ask for copies of police reports, together with receipts, or proof of ownership of stolen items.
Take care and enjoy your break!
The IFSO Scheme has provided an independent and free complaint resolution service for consumers for 21 years. The IFSO Scheme deals with about 300 complaints and 3,000 complaint enquiries each year about insurance and financial services.