Do you have the right insurance for your fourby?
WORDS AND PHOTOGRAPHY BY ANTHONY KILNER
Imagine cruising through the outback and a roo jumps out in front of your fourby. You slam the brakes, the fourby skids on the soft dirt and the next thing you know, you’re on your lid. Are you insured properly? In eight out of 10 cases, you probably are. In the other 20 percent of situations, you could be in for a spot of drama with the insurance company. Why? Because you haven’t told them every detail about your fourby - what you’ve modified and what general accessories have been fitted. Having just gone through a heap of research to update my ‘Cruiser’s insurance policy with TCIS Insurance Brokers, and having listed all the accessories and modifications on the old girl, I’ve been wondering just how many fourby owners aren’t insured properly.
THE INSURANCE COMPANY
To start this yarn, we have to go back to basics and a silly, some might say invasive, document called the Duty of Disclosure. This duty means that you, the person looking for insurance, must disclose all facets of your vehicle, accessories and modifications, as well as a driving history for the past five years, which many feel is nobody else’s business. This will determine, however, whether the company will insure you and, if so, for how much. This Duty of Disclosure applies throughout the term of the insurance cover, meaning that if you add any accessory or do any modification or cop a speeding ticket, you must notify the insurance company. If you don’t, a couple of things could happen.
First, you may find your insurance is void, meaning in the case of an accident or theft, you are not covered. Second, if you add an accessory that’s not listed in writing by the insurance company, and your fourby is damaged (written off), the insurance company takes total control of your vehicle - in other words, it owns the salvage. The company is, therefore, under no obligation to replace the accessory added, and in fact, it can legally keep or sell that accessory.
For example, you are touring the Simpson and the fourby catches fire. The roof-rack and the gear you’ve stored on it, purchased two days before the trip and not listed on the policy, are saved, but the car’s written off. The insurance company can keep the roof-rack (it’s an accessory bolted to the vehicle) and only supply the monetary value for the vehicle according to what’s listed on the policy. It sounds cruel, but that’s the way the cookie crumbles.
To avoid such dramas, there are two things you need to do. First, be honest from the start. Second, notify the insurance company in writing of any modifications as soon as they are done and ask for a written confirmation to add to your policy document. The final point is that the insurer also looks at the safety and performance of the fourby being insured. If a modification is not noted, and an accident is caused, the insurer is well within its rights to argue that the cause of the accident was the modification. You’d be left stranded with a busted fourby, not to mention a repair bill for the other vehicle. Any modification that (potentially) destabilises the vehicle in any way will be frowned upon.
Another argument by insurance companies is that a big engine and a 5in body lift, without upgraded suspension and brakes ratified by a registered engineer, could be grounds for declaring your fourby unsafe. Insurance won’t be offered, or would be disputed in the case of an accident. If someone else causes an accident, there would be no problems from your insurance company, as the mods are not the cause. However, if your fourby is not street legal, the other party’s insurer might dispute your claim against its client. It’s the owner’s responsibility to take due care of the vehicle and not ignore the risk factors, expecting the insurance company to pick up the tab.
QUESTIONS FROM THE INSURANCE COMPANY
When you call for an insurance quote, have the following information ready: the full vehicle details (for example, 1990 Toyota LandCruiser station wagon, white, 1HZJ diesel with aftermarket turbo and manual five-speed), the date of purchase, the purchase price, and a list of accurate modifications and accessories (for example, 2in body lift, 4in suspension lift, ARB Air Lockers, Aerotech seats, UHF radio, Barrett 950 HF radio, tinted windows, Warn 9000lb winch and 33x12.5R15 mud tyres on alloy rims).
Also, take note of any engineer’s certificates that may apply. If you’ve owned the vehicle for more than six weeks without insurance, a current roadworthy certificate may be required. Along with the mods, a recommended retail or purchase price of all the mods is handy so that you have a total price guide for the vehicle, accessories and mods combined. In the end, though, the cover offered by the insurance company is not new-for-old, it’s indemnity. The value placed on the accessories and mods must be realistic.
The more accurate and detailed your information, the greater your chance of obtaining insurance. When talking to a couple of insurance companies while researching this story, none would quote me on a modified vehicle that doesn’t exist. In other words, they won’t quote on mods you think you’ll do. As you do them, you need to let your insurer know, and it will act accordingly. Invariably, this will cost more, but for peace of mind, it’s worth the expense.
AGREED OR MARKET VALUE?
Another question you’ll need to be prepared for is what type of insurance you require, and whether you want an Agreed Value or Market Value policy. You might have no choice with the latter, depending on the insurance company. For our purposes, we won’t look at third-party fire and theft policies, which are available, but full comprehensive policies, the usual choice for most fourby owners. Market Value is the current value of the vehicle concerned, determined by pricing set by the Glass’ Guide. This trade journal lists prices for private sales and yard sales, and provides general ratings for the vehicle in relation to age and condition.
Insuring by Market Value means that, if you buy a $50,000 fourby off the showroom floor, the market value might be $43,000 on the street, so that’s what’s covered. Add $10,000 worth of accessories and the market value might go up by $2000, again as that’s all the market will pay. Some insurance companies will offer a 12- or 24-month new-vehicle replacement policy that guarantees you’ll get a replacement vehicle of the same value. This is another question worth raising before signing on the dotted line.
Agreed Value means that the amount the vehicle is covered for is set and does not fluctuate with market changes. This type of policy comes under close scrutiny by the insurance company because it is liable for a set figure including accessories, as agreed by both parties. To reach agreement on value may require a valuer’s certificate (see separate panel).
Regardless of what policy is obtained, the insurance company takes into account a range of factors that determine a vehicle’s value. Apart from the standard Glass’ Guide pricing, the insurer looks at the history of each vehicle in relation to accidents and previous claims - for example, the vehicle’s popularity with thieves - as well as the depreciation on new and used models. Also assessed are the cost of repairs, the history and age of the drivers, whether the vehicle is garaged, on the street or in a shed, and whether the area is a hotspot for damage or theft. These are just a few of the factors that insurance companies will use to determine a premium for both Market Value and/or Agreed Value policies.
QUESTIONS YOU NEED TO ASK
Okay, you’ve been on the phone, finally got all the information across to the operator and they’ve given you a quote. Now it’s your turn to give them the third degree - respectfully, of course. There are some very important questions to ask the insurance company when insuring a 4WD. First, where are you covered to travel? Some companies will only insure you on gazetted tracks. This means that you can be covered on parts of Fraser Island, including stretches of beach, but not cruising around the sand dunes of Robe or Beachport.
Some insurance companies won’t cover a fourby at a competition track, regardless of whether you compete, and no-one covers you for competition use in the general insurance market. This means that, if you went to Oran or Calder parks or a specified 4WD event as a spectator, your vehicle might not be insured. It might also mean that, if your club holds a gymkhana, however tame, you’ll not be insured to be there as a spectator. Other questions to ask relate to modifications, including engine swaps, body lifts and suspension lifts. Some companies will insure a standard fourby, but once the accessories start adding up and the modification list grows, they might tell you to find a new insurance company that deals with modified off-roaders.
Then there’s the camping gear, laptop computer, camera and video equipment carried while touring. Are these things covered? In some cases, your base camp is covered under your insurance policy against theft and damage, but again, you have to ask the insurer.
Also, ask about your no-claim bonus and rating-one protection, as these can move with you from insurer to insurer, provided the insurance company states it in writing.
One major point is to ask about policy discounts. For example, some insurance companies offer a restricted policy prohibiting drivers under 30 years from driving the vehicle (except in an emergency), and it will reduce the premium. There might be a low-kilometre policy whereby the vehicle does 10,000km or less in a year and is driven only on weekends. There may be others, but you’ll need to ask the questions.
Finally, ask your insurer to put everything in writing and to highlight the clauses in the policy booklet before it’s sent to you. This is the only way to get piece of mind. Above all, read the policy, and if you don’t understand any part of it, check with the insurance company. Most are happy to explain.
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