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What Voids Car Insurance?

Learn about the common factors that could void your car insurance with Savvy.

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, updated on February 15th, 2024       

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Car Insurance Banner - Woman pinches her nose in frustration while sitting at the wheel of her car.

Car insurance provides protection and peace of mind in the event of unexpected accidents or damages. However, various factors can lead to your policy being voided, leaving you exposed to significant risks. It's important to be aware of the impact your actions could have.

In this informative guide, Savvy explores the common reasons why car insurance policies may become void in Australia. We delve into actions and violations that can result in the loss of coverage, and examine the potential consequences.

What does it mean if my car insurance is voided?

When your car insurance is voided, it means that the policy loses its legal effect and it is treated as if it never existed. This typically occurs when the policyholder breaches certain terms or conditions outlined in the policy, such as providing false information, failing to disclose important details or engaging in fraudulent activities.

After a car insurance policy is voided, the insurer is no longer obligated to provide coverage for any claims, and the policyholder loses the financial protection and benefits associated with the insurance policy. This can have serious consequences, including potential legal and financial liabilities, so it’s crucial to understand the terms and conditions of your policy and comply with them to avoid the risk of voiding your car insurance coverage.

What could void my car insurance policy?

There are a number of factors that can void your car insurance coverage. Common factors include:

Unlicenced drivers

Driving without a valid driver’s licence is illegal in Australia and can void your car insurance policy. If you have an expired licence, drive a car you are not licensed to drive or let an unlicensed driver operate your vehicle, any accidents or damages that occur may not be covered by your insurance.

Driving under the influence of alcohol or drugs

Driving while under the influence of alcohol or drugs is not only dangerous but can also result in the voidance of your car insurance. If you are found to be impaired at the time of an accident, your insurance may not cover damages or injuries.

In Australia, it is illegal to get behind the wheel with a blood alcohol content (BAC) exceeding 0.05 if you hold a full driver’s licence; if you have a learner’s or provisional licence, you must not drink at all before driving.

It’s important to note that ‘drugs’ in this context can also include legal medications such as sleeping pills, painkillers and other drugs that could impair your ability to drive.

Driving a car that isn't roadworthy

Operating a vehicle that is not roadworthy – in other words, that is not in good enough condition to be driven safely – can both put you at risk and void your car insurance coverage. Your car needs to meet certain required standards of roadworthiness, including having valid registration, functioning lights, brakes and other essential components.

Driving an overloaded car

Overloading your vehicle beyond its legal carrying capacity is not only against the law but can also jeopardise your insurance coverage if you are in an accident. This not only refers to exceeding the maximum weight limits specified by the manufacturer but also to carrying more passengers than permitted and carrying a load that is improperly secured.

Damaged tyres

Driving with damaged or worn-out tyres can compromise your safety and void your car insurance. Tyres with insufficient tread depth (1.5mm in Australia), bulges, cuts or other significant damage increase the risk of accidents, so it is important to check them and replace them before they get to this point.

Wear and tear

Car insurance typically covers sudden and accidental damage rather than general wear and tear or gradual deterioration of your vehicle, which could include damage caused by rust, mould, mildew, damp or rot. Regular maintenance and upkeep are essential to prevent issues that could lead to mechanical failures or breakdowns.

Modifying your car without informing your insurer

Making modifications to your car without notifying your insurer can void your car insurance coverage. Some modifications, such as engine modifications, changes to the suspension or alterations that increase the vehicle's performance, can impact the risk profile and safety of your vehicle. It's crucial to inform your insurance provider about any modifications to ensure that your cover remains valid.

Using your car for business purposes

If you use your personal vehicle for business purposes, such as ridesharing or delivery services, you need appropriate cover. Personal car insurance policies typically exclude coverage for commercial use, so if you use your vehicle for business without the necessary insurance, any accidents or damages that occur while on business-related activities may not be covered.

Reckless acts

Engaging in reckless driving behaviours can lead to the voidance of your car insurance. This includes activities such as speeding, street racing, participating in illegal activities or intentionally causing damage. Reckless driving is a criminal offence, so as well as voiding your policy, you could face demerit points, fines and even loss of licence and jail time.

Not paying your premiums

Failure to pay your insurance premiums can result in the cancellation or voidance of your car insurance policy. It's important to keep up with your premium payments to maintain continuous coverage. If you miss payments or allow your policy to lapse, your insurer may consider your coverage void, leaving you without insurance protection.

Are there any other actions or situations that could void my car insurance?

There are many other factors that can potentially void your car insurance coverage, including:

  • Providing false information on your application
  • Using your vehicle for illegal activities
  • Driving against medical advice
  • Using the wrong fuel in your vehicle
  • Leaving your car unlocked

What are the consequences of voided car insurance?

As mentioned, when a car insurance policy is voided, it means that the policy is considered null and void, as if it never existed. The consequences of this may include:

  • Lack of coverage: once a policy is voided, you lose the protection and coverage it provided. This means you will be personally responsible for any damages, losses or liabilities arising from accidents or incidents involving your vehicle.
  • Financial liability: without insurance coverage, you may have to bear the financial burden of repairing your own vehicle or covering the costs of damage to third-party property.
  • Legal repercussions: driving without valid car insurance is against the law in almost all circumstances. If your car insurance is voided and you continue to drive without obtaining new coverage, you may face legal penalties, fines or even the suspension of your driver’s licence.
  • Difficulty obtaining future coverage: having a voided car insurance policy may make it more difficult to secure coverage in the future as insurance providers may view you as a higher risk.

How can I ensure that I don’t void my car insurance?

To avoid voiding your car insurance, it's crucial to comply with the terms and conditions of your policy. Your responsibilities include:

  • Following the law
  • Taking reasonable precautions to prevent damage and theft
  • Keeping your car well-maintained and serviced
  • Cooperating with your insurer when making a claim
  • Regularly reviewing your policy

If you believe that your car insurance may be at risk of being voided due to a change in circumstances or any other factors, it’s crucial to contact your insurer immediately. Discuss the situation with them, provide any necessary updates or information, and seek guidance on how to ensure your coverage remains valid. Prompt communication can help address any potential issues and ensure that you are appropriately protected.

Frequently asked questions about voiding car insurance

Can I reinstate my car insurance if it has been voided?

If your car insurance has been voided, it will be as if it never existed. In most cases, you will need to apply for new coverage and provide accurate information to your insurer. Keep in mind that a voided policy may impact your future insurance options, as you may be viewed as a higher risk by insurers. 

What is the difference between cancelled and voided car insurance?

Whether your car insurance policy is cancelled or voided, you will be left without car insurance cover. However, they are not one and the same. If your car insurance is cancelled, it comes to an end before the policy end date but is valid until that point – meaning all claims submitted before this point should be valid and you may be able to get a refund for premiums paid. When a policy is declared void, it is completely invalidated, and it is as though the policy was never taken out.

Could my car insurance policy be voided if I don’t disclose my criminal record?

Failing to disclose your criminal record when required by your insurer could potentially void your coverage. Insurance companies ask for certain information during the application process, and providing accurate and complete information is crucial. Your criminal record may be considered relevant to your insurance risk profile, and the insurer may need this information to assess the level of risk associated with insuring you. Failure to disclose your criminal record can be seen as misrepresentation or non-disclosure, which may result in the voidance of your car insurance policy.

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