Update: October 2016:
We've just swapped our 4x4 Insurance over to Club 4x4, a new insurer who specialises in 4WD's. Their policies are substantially better than what I've seen elsewhere. You can read the full post here - Why we've swapped to Club 4x4 Insurance.
4x4 Insurance is something that people often overlook. Having the right Insurance for your vehicle is vital, primarily because of financial implications if something does go wrong. As a minimum, everyone should have third party property insurance, as it could save you a lot of money. The risk is simply not worth taking. Having good quality insurance is a way to protect your four wheel drive in case the worst happens (as we all know it does from time to time!). I'd suggest you have a read of this too; Is your 4WD Legal?
Types of 4WD Insurance
When you pay your rego for your four wheel drive this is included. It basically means that the insurance will cover other people involved in an accident with your vehicle. These costs can be extensive in a serious accident. This is why driving a vehicle that is not registered is not a good idea!
3rd Party Property
As I mentioned above, everyone should buy 3rd Party Property Insurance for their four wheel drives. This covers the other vehicles in a crash if you have an accident. It does not cover your vehicle. Without 3rd Party Insurance, you can be up for many thousands of dollars if you hit an expensive car. If something goes wrong and you run into the back of a new four wheel drive or nice sports car, you can get yourself into a lifetime of debt and the insurance companies will hassle you until they get paid. I know people who have had to take out a loan over many years to pay for a car just because they thought they could get away without paying for 3rd Party Property Car insurance. The cost of this insurance is nothing in comparison to the risk you run of having an accident over many years of driving.
Comprehensive insurance covers both your vehicle and any other vehicles involved in a car crash. It’s worth looking at the cost of your premium to decide whether or not you want to pay the extra money (as the premiums jump up quite a bit). Generally those with a vehicle worth over $15 000 decide to pay for Comprehensive insurance, and if it is worth less than this then 3rd Party Property can be a good option. However, this is not always the case. It really comes down to your individual circumstances.
Many 4x4 Insurance companies will offer extras, like free glass replacement, hire cars in the case of an accident, cover for theft and fire and the list goes on. Depending on your circumstances these can be great value (given that they usually don’t cost that much per year extra).
Who sells 4WD Insurance?
There are many, many companies that sell 4x4 Insurance. Just a few of these are Allianz, RAC, HBF, Youi, Bingle, NRMA, GIO, Budget Direct, Just Cars, Shannons, SGIO, QBE, Westpac and the list goes on. There are many other companies that also offer four wheel drive insurance, and many policies vary from one to another.
Getting a good deal on Four Wheel Drive Insurance
My best advice to anyone looking for 4x4 Insurance is to shop around. Make a list of quotes from at least 3 companies, and then try to bargain for the best price. Many companies will beat another quote, which is how you get the best deal. I know when I was looking for insurance I was quoted $2200 a year for full comprehensive by one company and then $1000 by another, which is a massive difference. You can save several hundred dollars each year by spending a few hours getting quotes! Even if you only save $200 that’s still time well spent!
If you have other insurance policies, consider combining them. You get significant discounts for combining private health, home and contents, boats, caravans and camper trailer insurance together (for obvious reasons). Don’t be afraid to let your current insurance provider know that you aren’t happy with what they are offering and that you are looking around. They might just give you a better deal. If you don’t shop around you are encouraging the insurance companies to stop being competitive, which does no one a favour!
What type of insurance do you need?
The type of insurance that you purchase should be based around your individual circumstances. I won’t give specific advice. Consider whether you could afford to buy another vehicle if your one got wrote off and you weren’t insured. Consider how many years of paying your premium it would take to buy another car. Consider how old you are, and the number of accidents you have had. If you are four wheel driving there is a greater chance you will do damage to your car, and some people just like the comfortable feeling knowing that if they do damage it will be covered.
Insuring your modifications
If you have done any modifications to your 4WD, you should get them insured. This includes everything from a new sound system through to a bull bar, upgraded seats, alarms, LPG systems, engine modifications, tyre and rim upgrades and the list goes on. These things are often worth just as much as your vehicle over a few years of modifying, and if they aren’t included in your policy then you can get a serious shock!
Insure your gear inside the car!
If you carry anything that is of value in your vehicle you want to know that it is covered too. Whether that be camping gear, sports gear, electronics or anything else, it doesn’t cost a whole lot more to make sure that everything is covered. Many people who are holidaying in their four wheel drive have several thousand dollars worth of gear inside, and it hurts when it gets taken and you aren’t covered for it.
Agreed Value vs Market Value
More and more insurance companies are pushing for Market value only, which is a serious problem, particularly for four wheel drives. In a nutshell, your vehicle depreciates over time and becomes worth less and less. The market value decreases from year to year, meaning that you are covered for less the longer you are insured under Market Value policy. Basically, if you purchase a car, and have an accident several years later you can be in for a rude shock when you find out what the car is ‘worth’ as the market value could have dropped significantly.
The reason it is so hurtful for four wheel drivers is that most fourbies have at least a few modifications on them, which lifts the value. Market Value is usually calculated off a standard vehicle, and any modifications or upgrades are ignored unless listed in your policy. If you have to get Market Value 4x4 Insurance, make sure that you have your modifications listed for the right value.
My preferred way to get 4x4 Insurance is to have an Agreed Value policy. This is where you state how much you want your vehicle insured for (within reason) and this stays the same year after year. This is great because you can incorporate everything into your car. Remember that increasing the amount your vehicle is insured for costs very little compared to the extra money you would get back in the case of an accident.
Is it worth joining a 4WD club?
A lot of people suggest joining a four wheel drive club, because insurance companies often give discounts if you are a part of one. If you are part of a club (one that is formally recognized) then they believe you are a better driver and will reward you for it. If this is the case in your situation, then it’s worth doing!
Is your car legal?
The biggest mistake people make when getting insurance is buying it for a car that is not legal. I want to make this very, very clear. If you are driving a 4WD that is illegal in any way at all, the insurance companies are able to decline your claims. What this ultimately means is that buying insurance for your car could be a waste of money if it is even slightly illegal. There are so many ways that your car can be illegal, ranging from tyres that are too big, lifting your car too much, wheel spacers, engine modifications that are not approved, spotlights in the wrong place and the list goes on for pages and pages. Is your 4WD legal?
Every state has different laws regarding this, so if anything has been modified it is vital that you find out whether it is legal or not. There are some very serious consequences if your car is not legal and you are in an accident. As a general rule, most 4x4 Insurance companies will cover any modifications on your vehicle provided they are legal, as defined by the laws in your particular state. However, you need to notify them of the modification, or again they are able to reject your claim.
What can you expect to pay for 4WD Insurance?
This is a broad question, because of the number of variables. Males get charged higher premiums than that of females, younger people get charged more than those who have been driving for many years, four wheel drives get charged more than smaller cars, unsafe colours get charged more than bright colours that stand out and of course if you have had any accidents then you can expect a sharp premium rise! In saying this, I will give my example below:
1997 Hilux insured for $11500 with comprehensive insurance (and free glass) was about $1100 a year when I was 19. Since then, it has dropped to about 800 (21 y/o male). The premiums drop significantly as you get older, and depending on the vehicle you are driving.
Are you insured for off road use?
This is something you want to look into. Not every company will insure you for off road use (and their definitions of off-road use can vary) which kind of defeats the purpose of insurance in a four wheel drive for most people! Many companies will insure you anywhere in Australia provided that you are on a four wheel drive track that is legal. Some will not insure you for beach driving, and there are often other conditions that you want to look into.
Free Windscreens with 4WD Insurance?
For most people, it’s worth paying a few dollars more each year for free windscreens. When you are four wheel driving the chance of cracking or chipping your windscreen is significantly increased, and given the cost that it is to get a new one fitted it is usually a good decision to make.
Is it worth insuring you car?
I mentioned above that everyone SHOULD have 3rd party property insurance regardless of how much your car is worth, but a lot of people choose not to insure their own vehicle. This is particularly in the case of vehicles that are worth under $5000 as the premiums often don’t justify what you are insuring! For me personally, I’d prefer to pay a bit more knowing that if I do happen to damage my car off road it is covered. Having to fork out for another car is something I wouldn’t be able to afford to do, which is my justification. Weigh up your situation and then make an educated decision.
Be wary of modifications to your vehicle
I can’t stress enough that you take care in modifying your vehicle. I would say that at least 10% of four wheel drives on the road are illegal in one way or another, which causes a lot of drama when they are in an accident in regards to insurance companies. There is nothing worse than thinking you are insured to find out that you are knocked back because your tyres are 50mm too big, or because your car was lifted up too much.
Engineer Certificates and 4WD Insurance
If you do want to modify your vehicle beyond what is legal, you need to take it to an engineer. They will be able to tell you what you can do and what boundaries you need to stay within, and then when it has been modified (or you can pay for them to do it) they will test it and sign it off for you (if it passes!). It will likely need to go over the pits again, and potentially a lane change test. This route is expensive, but it is the only way to put some of the more serious modifications on your vehicle and keep it legal at the same time.
Report any changes to your vehicle
I have mentioned this above, but I will say it again. If you change anything on your vehicle you need to report it to the insurance company. This is not only good practice because they have a record of any improvements you have made, but it is also a requirement for when (if) you submit a claim. If you insure your car as a stock Landcruiser and have an accident with 35” Maxxis Bighorn tyres, a 5 inch lift kit and other modifications without the insurance company knowing about it (and getting it engineered in this case) you could be in a lot of financial trouble!
4WD Insurance against theft and fire
Many comprehensive policies cover theft and fire, and if they don’t its worth considering. It barely costs anything, and when you think about the value of your four wheel drive it makes the decision easier. Regardless of what people think the value of your car is, it takes years to set a four wheel drive up just how you want it, and that’s where the real value comes into place.
Four Wheel Drives are worth so much to so many of us. It takes a lot of time, energy and skill to make them into the machines that you want them to be, and to see it all flushed away is something I know I would much rather avoid. 4x4 Insurance can be a life saver; make sure you pick the right policy for your individual situation, that your car is legal and that you are getting a good deal.
I’d like to hear below from those who have had issues with insurance, your opinions on modifications and four wheel drives and any companies that you would recommend! Also, feel free to put up examples of what your premiums are and the value of your car.