What to expect when your car insurance gets paid out?

Last updated on November 25th, 2021 at 03:17 pm by Bill Tsouvalas

When you purchased your wheels, you made sure to take out a car insurance policy that will protect it and your wallet from having to fork out on accidents or unforeseen damage to your car. However, you may be caught off guard when your insurer tells you that they will not be able to pay out your car insurance. Here are four handy tips on what you can do when faced with such situations.

Ask your insurer why you are not getting the payout?

Car insurance can be a great way to cover costs such as a $3,000 repair after a crash. Aussies paid an average of $1,027 p.a. for their car insurance, which can be a real shocker when your insurer tells you that they will not be paying out your policy. You may feel cheated and this could send emotional fireworks going off. First, try to keep calm.

The next thing you can do is approach your lender and ask them why the insurance will not be paid out. There could be a logical error on their behalf or your end that has caused the policy to not be paid out. If you feel that the payout is a raw deal, don’t be afraid to say so. However, make sure that you have you approach your insurer with facts and numbers to smooth out the process for you.

Be aware of the terms of your policy

Not having your policy paid out can be frustrating, but it helps to check the terms and condition of the policy disclosure that came with your insurance to see if there are common traps you have fallen in that have caused your policy from not being paid. Common traps can be things such as:

  • Assuming your policy will cover something and it doesn’t
  • You fall under their exclusion listings such as reckless driving
  • An accident occurring a certain distance away from your home that they will not cover

What to do when your plight is not heard?

If you are not satisfied with the outcome and feel like your plight is not being handled well, you can take such matters to the Australian Financial Complaints Authority (AFCA). This independent body can help handle the dispute between you and your insurer to ensure that the matter is handled properly.

You finally reach payout

This may put a smile on your face that the debacle has been settled, but there is still more work cut out for you. You may want to start checking if your current insurer is offering you the best policy that is available on the market. If you find that you are forking high premiums, check to see if you have the right car as this affects your premiums significantly. Remember to put in your research to see what will affect your premiums and compare your way to a deal that hits your sweet spot.