Flood Disaster

Australians scramble to insure their cars after flood disaster

February 1, 2011

Flooding across Queensland has destroyed hundreds of homes and affected the lives of thousands. With the worst of the disaster receding, the question many car owners are asking is whether their car insurance policy covers them for flood damage, and how they can protect their vehicles in the future.

The good news is that many comprehensive insurance policies cover flood damage caused by natural disasters, but you will still need to check with your provider for specific coverage as well as any costs you may incur.

Individual insurers
Virgin Money, CGU and NRMA comprehensive car insurance cover their customers against flood damage. Budget Direct’s comprehensive motor policy also covers for flooding, storm damage caused by natural storm water run-off and hail.

‘We cover everything, except …’
Exceptions to the rule are dotted within many policies; some claims can end up being rejected because of technicalities such as what caused the flooding, the strength of the water, and even your actions.

There’s a difference between the driver who makes their four-wheel drive go up against a metre of water, and the driver who wakes up to a flooded garage. So just because your car insurance may cover flooding, it doesn’t keep you safe from human stubbornness, which means it’s always best to veer on the side of caution.

With the phones ringing off the hook, there might be slip ups and delays on the way to processing your flood claim. The best way to speed things though is to prepare your evidence concisely (times, locations, flood information, photos, eye-witness statements) and hope for the best from your insurer.

When ‘no’ isn’t enough
In a worst-case scenario where your claim has been rejected, most insurers offer additional reviews to double check your case, and as a last resort, the Financial Ombudsman Service (FOS) can step in to make an objective and final ruling.

Now that flooding has drained into the back of our minds, prepare for the future by asking the right questions and comparing the cheapest car insurance policies when you sign up. Popped tyres and scratched rims are one thing, but it’s time to get serious and keep yourself afloat when it comes to disastrous flood damage.

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Learn more about car insurance

Does insurance cover a stolen car if keys were in the car?

A car insurance policy that covers the theft of your car, such as third party fire and theft insurance, usually covers a stolen car, even if the keys were in the car’s ignition.

However, your insurer may deny the claim if you live in an area where there have been several car robberies reported recently. They will see you leaving the keys in the car as a case of negligence. In such cases, your insurance provider may even expect you to have installed anti-theft security measures in your car. 

You may need to confirm whether or not you left your keys in your car, and if they had been stolen or misplaced, before filing your car insurance claim. The loss or theft of your car keys may be covered by a comprehensive car insurance policy, but usually as an optional item.

If you can confirm that your car keys were stolen, mention this in your claim as this will help establish that your car was not stolen as a result of your negligence.

Can you insure your car for 6 months?

Most Australian insurers won’t offer you a 6-month car insurance policy, so you may need to buy a policy that covers your car for damages and cancel it after six months. You will need to purchase comprehensive car insurance to protect your car from accidental damage, theft, vandalism, or natural disasters.. 

Consider checking whether your 6-month comprehensive car insurance will cost more if you pay monthly or six-monthly premiums instead of a one-time annual premium. Another question to ask the insurer is whether you’ll need to pay administration or cancellation fees when you cancel the policy.

Alternatively, you can look for a suitable ‘pay as you drive’ car insurance policy, which usually offers you the coverage of a comprehensive car insurance policy but only requires you to pay for the distance driven. Such a policy may not be the ideal 6-month car insurance plan as it is based on how much you drive rather than for how long. If you need to drive a lot, you may end up paying more than you’d pay for regular car insurance. 

Can I drive a new car without insurance?

It is illegal to drive a car in Australia without insurance. Most states require that you get your insurance in place before you drive the car off the dealership’s plot. So, the answer to whether driving a new car without insurance is no, it is not allowed.

The only time you can possibly legally drive an uninsured car is when you have to get the vehicle registered. You should drive straight to an inspection station or your state's vehicle registry. You must also make sure that you take the most direct or convenient route possible.

It is important to note that your compulsory third party insurance (CTP or green slip) isn’t valid until your car is registered.

Driving an unregistered or uninsured vehicle can have severe legal repercussions. If you are involved in an accident, and are driving an unregistered and uninsured vehicle, you will be personally liable to pay compensation to anyone hurt, as well as for damages. If you are caught driving a vehicle without insurance, you may be fined or even have your vehicle seized.