Thursday 29 September 2016

Motor cover rules hang you out to dry

Bald tyres, bad fuel and an out-of-date NCT could get your claim turned down, writes Louise McBride

Published 31/01/2016 | 02:30

Bald tyres, bad fuel and an out-of-date NCT could get your claim turned down
Bald tyres, bad fuel and an out-of-date NCT could get your claim turned down

Many drivers could have to foot the bill for damage to their cars - because a tightening-up of the rules in a lot of motor insurance contracts means they run a greater risk of their claims being turned down. This is despite the massive car insurance price hikes of the past year.

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Some insurers have recently changed the wording in their motor insurance policies and, as a result, many drivers could find that they are not covered for loss or damage to their car - even though they had been previously.

Driving alone in a car when you are a learner driver, driving with worn car tyres or an out-of-date National Car Test (NCT) certificate, or innocently filling your car with contaminated fuel are just some of the reasons that insurers can now turn down your claim.

Learner drivers

It is almost seven-and-a-half years since all provisional licence holders were banned from driving solo. Before that ban, drivers on a second provisional licence were allowed to drive alone.

Shortly after the learner ban on driving unaccompanied was brought in, the insurance lobby group, Insurance Ireland, said that learner drivers were still likely to be covered if they were in an accident whilst driving solo. However, many insurers have put some new wording into their motor insurance policies since then which effectively means that insurers are within their rights to refuse a claim if a learner is driving alone.

Aviva recently sent a notice to its customers to inform them of changes to its motor insurance policies. One such change relates to learner drivers. Holders of learner permits "must specifically comply with the requirement to be accompanied at all times by a full driving licence holder while the learner permit holder is driving", states a new clause in the policy.

"While technically this updated wording does not change Aviva's current liability, it makes our policy conditions more clear for our customers," said a spokeswoman for Aviva when asked by the Sunday Independent if the new wording meant that a learner would not be covered when driving solo.

Aviva added: "The purpose of introducing the new sub-conditions is to better reflect the road traffic legislation relating to the terms of holding a driving licence and the restriction, condition or limit on such driving licence."

Other insurers have taken a similar tack.

Liberty put a new line into its motor insurance policies last February, which stated that for a driver to be covered, he "must meet the conditions and any limits of the driving licence".

Previously, Liberty's motor insurance policy had simply stated that it would cover a driver as long as he held a valid licence.

A condition of the learner permit is that you cannot drive a car without being accompanied by someone who holds a full driving licence.

A spokeswoman for FBD said that if a driver does not meet their legal obligations "in relation to licensing or other similar requirements, it may affect the payment of certain non-injury claims.

"However, we always consider the facts and circumstances before taking such a position," she added.

"Whether you're covered when you're a provisional licence holder who is driving on their own is a huge grey area," said Jonathan Hehir, managing director of coverinaclick.ie.

"Given the new wording put in on many policies, potentially the insurer has the right to refuse to pay a claim."

Roadworthy

Drivers have always had a responsibility to ensure that their car is roadworthy. However, some insurers have fine-tuned this rule recently.

Aviva's previous car policy, for example, stated that drivers must keep their cars in roadworthy condition and "take all reasonable steps to prevent accident, injury, loss or damage".

In its updated policy, Aviva stipulates that keeping a car roadworthy includes "ensuring that the tread depth on your car tyres is within the legal limits and, if required, that your car has a current and valid NCT".

Aviva's rules on roadworthiness were changed to "clarify and highlight the impact of any fraudulent activity, non-disclosure, misrepresentation, or a false or exaggerated claim - and the importance of the duty to take care," said a spokeswoman for Aviva. "Our changes spell out that duty to ensure your car is roadworthy. In all cases of an accident or claim, the circumstances will be taken into account."

Liberty's policy also states that a car must have a valid NCT "if required". Asked if it would refuse to cover a driver whose car had failed its NCT, a spokesman for Liberty said: "The specific circumstances of a claim need to be considered."

The insurance policies of Zurich and Allianz also state that cars must have a valid NCT cert - and tread depths that comply with the legal limit.

Some insurers have refused to cover the cost of accidental damage to a car if it doesn't have a valid NCT cert, according to Mr Hehir. However, insurers usually take a reasonable approach, he added.

"If the NCT is out by a week or two, insurers don't tend to make a big deal about it," said Mr Hehir. "These changes [to the policy wording] are more for cases where the tread depth of tyres is outrageously bad - or for drivers who haven't been maintaining their cars at all and who are in an accident as a direct consequence of that."

Contaminated fuel

One area where you could fail in your insurer's eyes to have a duty of care for your car - and through no fault of your own - is if you fill it with contaminated fuel. It's just over a year since hundreds of cars were damaged after motorists filled their cars with contaminated fuel. Repair bills ran into the thousands of euro. Some insurers have recently changed the wording of their policies to rule out cover for such damage.

Aviva's updated policy, for example, states that it "will not pay for loss of or damage to a car caused by incorrectly fuelling the car - or the use of substandard or contaminated fuel, lubricants or parts". A spokeswoman for Aviva stated that the new wording "clarifies the underwriter's intention" in relation to contaminated fuel in a car.

"Motor insurance policies are not designed to provide cover for vehicles which suffer mechanical breakdown over time due to the use of substandard or contaminated fuel, lubricants or parts," she said. "Drivers do have a duty to ensure they buy their fuel from a reliable source."

Many of the drivers who filled their car with contaminated fuel did so innocently, however.

Some insurers , such as Liberty and FBD, cover damage caused by contaminated fuel. "We do cover loss or damage resulting from fuel contamination and mis-fuelling - subject to the cause of this damage being proven," said FBD.

While Liberty will cover damage caused by contaminated fuel, it won't cover drivers for any problems caused by putting the wrong fuel into their car - such as filling the tank of a petrol car with diesel, and vice versa.

Old cars

It is harder to shop around for insurance when your car is old because many insurers refuse to take you on as a new customer. The exact age of the car varies by insurer. Some insurers brought in their age limit over the last year; others have had it in place for some time.

Last July, for example, Aviva announced that it would not quote a new customer who wants to insure a car that is 14 years-old - or older. Anyone currently insured with Aviva who has an older car will continue to be covered - as will any Aviva customers who decide to buy an older car.

Allianz does not take on new customers whose cars are 15 years-old - or older. Liberty does not insure cars that are more than 20 years-old - if you're a new customer. That limit has been in place for over 10 years.

FBD could refuse to take you on if your car is 12 years old or more. "In some new-business scenarios, we apply a 12-year-old limit - for example, with online quotations," said FBD. "For existing customers, we do not have an age limit."

Review

Earlier this year, Finance Minister Michael Noonan ordered a review of the motor insurance sector - as a result of the massive price hikes that consumers have been hit with. This review is badly needed but it shouldn't just concentrate on price - it must also look at how insurers can use the rules in motor insurance policies to get off the hook for a claim. It's bad enough paying over the odds for motor insurance - it's even worse when you pay your premium only to find that you're not covered for damage when you most need it.

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