Beware the Traps of "Pay as you drive" Motor Vehicle Insurance:
It seems that every week that passes sees a new Insurance Company advertising the benefits of paying less for your motor vehicle insurance by only paying for the kilometers you actually drive.
It sounds great in theory however it also pays to be aware that this type of cover also exposes you to a greater risk that you may be uninsured in the event of a claim.
Lets look at an example of what may occur where you could be left uninsured:
You take out a "pay as you drive" motor vehicle insurance cover for 12 months on the basis that you never drive more than 10,000 km's per annum and you pay a really competitive premium on this basis. You feel great because you have saved yourself some big $$$$.
6 months later your circumstances change and you need to start using the car more often and with everything going on in your life you forget all about the fact that you told your insurance company you were only going to drive 10,000 km's per annum.
All of a sudden you've done 15,000 km's and unfortunately for you you have just hit the rear of a vehicle that stopped suddenly in front of you!
Time for you to lodge a claim because not only does your vehicle have significant damage but the vehicle you hit also has suffered damage and they are holding you responsible for repairs. Estimated repairs approx $10,000.
You phone the insurer to lodge the claim. Your insurer advises you that you only declared that you would drive a maximum of 10,000 km's per annum. And you have just clicked over 15,000 km's for the year. Whoops!
Think you are insured in this scenario?
Think again!
You have been warned!
Have you got your copy of my bestselling book "In Service" yet.
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Regards
Tony Bourke
Director
AIIB Insurance Brokers
Bestselling Author, Speaker and advisor.
www.tonybourke.com.au
www.aiib.com.au
