Getting Insurance - Some things you should know
Almost any insurance is better than no insurance. Having said that, getting the right level of insurance cover can still bring on a decent head-ache and take up quite a lot of your time. Keep in mind that most insurers will be happy to upgrade your insurance cover, once you become their customer.
You might think that the first priority of an insurance company, is to provide you with insurance. Not so. At the top of the insurance company "to-do list" is making a profit for share holders.
Though most insurers are quite good when it comes to straight-forward insurance claims (that is, where there is plenty of evidence to support a claim), those same insurer's are likely to challenge any claim they consider doubtful or suspicious. In particular, this includes the obvious, like breaches of your "duty of disclosure" and also what may (to you) seem like minor points in your contract (that possibly, you are not even be aware of).
Insurers are in business to make a profit and wherever possible to minimise their "exposure" or risk.
An insurance policy is a legally binding contract between the insurer and the insured (that would be you), where both parties have specified contractual responsibilities and obligations. If you fail to meet your responsibilities, don't expect to get paid when you make a claim.
• Don't provide your insurer with an opportunity to get out of their contract by being careless or foolish.
• Your Duty of Disclosure
Duty of Disclosure is a standard component of insurance contracts. This is the part where you are required to provide your insurer with accurate and often detailed information, so that the insurer can assess the amount of insurance and the likely risk (to the insurer and/or underwriter ) involved when insuring you and/or your property.
Often "Duty of Disclosure" will include advising the insurer if any details relevant to the contract have changed over time. For example: Perhaps you move to a new rental property and your dirt bike is now parked in the driveway instead of inside a secured garage (that is, the bike is now at higher risk).
If you provide misleading or inaccurate information to your insurer (and/or otherwise fail in your Duty of Disclosure), your insurer may either pay less than the originally insured amount, or quite possibly, may not pay out at all when you make an insurance claim.
• Product Disclosure Statement (PDS) & Common Policy Exclusions
The Product Disclosure Statement or PDS outlines the terms and conditions that apply to any particular insurance product. In essence, the PDS is the insurer's way of meeting their legal 'duty of disclosure' obligations by advising potential customers of their contractual rights.
Some things that many insurers will not insure you for are damage or loss resulting from Acts of God (which are generally Earthquake, Bush fire and Flood) along with Acts of War and these days almost anything related to and/or caused by Acts of Terrorism. You may for example, be able to obtain insurance against bush fire and flood, but you will probably be paying substantially higher insurance premiums. This will certainly be the case if you live in an area with a known higher risk.
Some insurers (like AAMI) simply won't insure dirt bikes (whether road registered or not). Other insurers (e.g. RACQ) may cover some dirt bikes and not others. Always ask specifically about your bike (year, make, model).
Bike insurance policy exclusions may also include any kind of competiton riding regardless of whether it's on a race track, trials (MX), bush rallies or even just weekend group trail ride with your mates. You need to know ... so don't forget to ask!
• Age Related Insurance Pricing
If you are under twenty-five (25) you can expect to pay higher insurance premiums or have a higher Insurance Excess. The reasoning is simple enough. Statistically speaking, your age puts you in a group with substantially higher risk, therefore you pay more.
Over time (generally years), if you don't make a claim, most insurers will give you a "No Claims Bonus" or improved insurance rating. This usually results in a reduction in your insurance premiums and less expense for you. If you make a lot of claims, your insurance premiums will almost certainly get higher.
• Age Related Insurance Excess
Not only are you likely to pay more for insurance because you are young, rash and inexperienced ... but you are also likely to have what is termed an "Excess" applied to your insurance policy.
An Excess is where you (the insured) have to pay a specified amount towards an insurance claim. The Excess amount could be anywhere from $500 to over $1,000 depending on the insurer and the terms of the insurance policy.
Since this is money that you will have to pay (for example, in the event of a motor-vehicle accident), before your insurer pays the rest ... it is worth knowing exactly how much the Excess is and what conditions apply to it.
Paying a higher insurance premium "may" (and only in some cases) help to reduce the Excess amount of your insurance policy. There does appear however, to be a growing trend for insurers to include some level of Excess on virtually all of their policies, regardless of age.
• Ask Questions
If you are in any doubt about how to get insurance, or what kind of insurance to get ... don't be afraid (or too proud) to ask a lot of questions ... or even ask for help. If you are young, don't just rely on advice from mates. This can get very expensive if you (or they) get it wrong.
So ask some one who has plenty of experience. Consider joining a club or forum with experienced members who may be willing to help.
There are four basic questions you should always have clearly answered before signing any insurance contract, and they are:
- Can I insure MY bike (year, make and model)?
- What am I covered for?
- What am I not covered for? (Policy Exclusions)
- How much will it cost for both Premiums and Excess?
Any insurer that is not prepared to give you straight forward answers in plain English, does not deserve your time or money! And remember ... if it sounds too good to be true ... it probably is.
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