Making a Claim on your Motor Vehicle Insurance

What happens if you need to make a claim for your car or bike?

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When people take out motor vehicle insurance, they hope they never have to use it.  While this may sound strange, insurance provides ‘peace of mind’ that in the event of accident or damage you will be looked after financially.

In this example, we look at what happens to Fiona as she goes through the claims process following an accident and is back on the road.

Fiona decided that she would take out comprehensive insurance for at least the first year after purchasing her car. Given the events of the last week in March she was mighty pleased she did!  Fiona was on her way to an indoor soccer match with her friend Diane. She approached an intersection and came to a complete stop as required by the sign. Once the intersection was clear she commenced to slowly cross it, but suddenly he was hit from behind by another vehicle. Fortunately, no one was injured but there was some damage to both Fiona’s car and the other vehicle. Fiona’s bumper bar and middle section of the hatchback door were pushed in. Both parties exchanged names, addresses and car details. The driver of the other vehicle thought Fiona was driving too slowly!

Fiona contacted her insurance company when she arrived home. They asked her a number of questions in relation to the accident and then asked her to complete a claim form. 

When Fiona checked her comprehensive policy, she realised that it had an ‘excess’ clause where he has to pay the first $700 of a claim. In addition, the policy also had a ‘no claims bonus’ where each year the insured does not make a claim, they are rewarded by moving up a rating level and paying a lower cost. (Drivers are given a rating, usually from 1-6 according to the number of claim-free years they have - rating 1 being the highest rating and rating 6 being the lowest.) 

Fiona was told by the customer service operator that it did not appear that the accident was her fault. However, they would contact her shortly to clarify her exact position. 

A few days later the insurance company called back. They advised her that the other party had admitted fault and that the insurance company would be seeking full compensation for the damage to Fiona’s car from the other party’s insurance company. Her insurance company would coordinate the whole process and she was asked to take her car to the company’s assessment centre, where a quote for repairs would be made and arrangements finalised. She was also told that, under her policy, she would be provided with a free hire car for seven days.  Finally, as the other party was paying for the repairs, the $700 excess would not apply and her rating would not be affected.


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