Insurance – Unfairly vilified
This week on FM Radio, Triple M, the insurance industry was once again vilified, this time by the hosts of breakfast radio.
The background of the matter was that one of the journalists was hit in the rear while driving across the Bolte bridge, and as a result of the hit, was pushed into the vehicle in front of him. The vehicle that caused the accident, failed to stop and the police nor City-link would assist with providing the registration number of the vehicle that caused the accident.
The insurer, in this case GIO, were criticised because they required the insured to pay the policy excess.
The reality is, a policy excess means that the insured is responsible to pay the first amount as shown on the schedule for any claim under the policy. The size of the excess is reflected in the premium charged on the policy. To make it easier for clients and as a value add, many insurers including GIO, have been waiving the Insured’s need to pay the excess where a third party who was 100% responsible is identified. This probably saves them the hassle of collecting the excess and then refunding it. But for whatever reason, it is to the Insured’s benefit that this process takes place.
Where this is not possible, then in the first instance the Insured is required and should, based on the price paid for the product, pay the excess. If during the recovery process the insurer is able to identify the vehicle and a successfully recovery is able to be retained from the third party, then the excess will be refunded.
As the excess is by definition the first part of any claim, it is only reimbursed when the balance of the claim has been paid to the insurer.
Rather than demonising the insurance industry for the approach taken in this case, all the people who are not required to pay the excess when they can provide the registration number and details of the responsible party, should be appreciative of the no-fault excess process.
With more and more people thinking it is acceptable to hit and run and an increase in road rage, coupled with a continued drop in price, my recommendation is to get a front and rear dash cam fitted to your vehicle and then this whole matter would be avoided.
The last point I would make is that whilst I was not present, I cannot understand with modern seat belts how the journalists chin hit the steering wheel if driving the vehicle correctly.