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Avoid a declined insurance claim

Having your home broken into over Easter or crashing your car on the way to your holiday destination would be bad enough. But not having your insurance claim accepted after the long weekend would be worse.

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The Insurance & Financial Services Ombudsman is the place to go if you want to complain about your insurance provider or a financial service. Ombudsman Karen Stevens said the scheme had seen a rise in complaints over the last three months. “Unfortunately, some of the most common complaints we deal with could have been avoided,” Ms Stevens said.

So the team behind the scheme has put together these six tips to avoid having an insurance claim declined.

1. Read your insurance policy
Make sure you understand what you are covered for. Take note of the policy exclusions and limitations.

2. Lock your home
Most insurance policies exclude cover for theft from unlocked premises. Taking “reasonable care” is a standard obligation on every policy. Let your neighbours know you’re away and leave sensor lights on.

3. Check your car before you travel
Make sure your car has a warrant, and check the “road-worthiness” of your car, including the tyres. Claims can be declined after an accident, because the car was found to be unsafe or un-roadworthy – even if it had a warrant. Tyres with a low tread, for example, can contribute to accidents; an insurer can decline a claim if the car is in any way unwarrantable.

4. ‘Lock it or lose it’ on your road trip
Leaving your car unlocked, windows down, or your handbag or valuables visible are grounds for insurers to decline a claim if you fail to take reasonable care.

5. Comply with your licence conditions
If you are driving “in breach” of your licence, you won’t be covered under any circumstances. “Parents often end up paying for the damage, not only to their own car, but to another car or property, if they allow their son or daughter to drive outside their learner or restricted licence conditions and an accident occurs,” Ms Stevens said. Common breaches include: driving with passengers on a learner or restricted driver’s licence, or driving between 10pm and 5am on a restricted driver’s licence, without a supervisor.

6. Take note of alcohol driving limits
There are insurance, as well as legal, consequences for driving over the limit. “Be aware of the new alcohol limits. In a recent case, the claimant was over the limit of 250 micrograms of alcohol per litre of breath, but under the old limit of 400 micrograms. He argued that, as he was under the legal limit at the date of policy renewal, he should have insurance for the damage to his car. But the legal limit applied at the time of the accident, not the policy renewal, and he had no cover.”

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