Mistakes, claims, disputes and official sources
Car insurance mistakes Australian drivers make, and how to avoid a refused claim
The most common car insurance mistakes in Australia, from relying on CTP to unlisted drivers, low agreed values and rideshare use, with what each one can cost.
The costliest car insurance mistakes in Australia are not about price. They are relying on CTP alone, leaving a regular driver off the policy, not declaring business, rideshare or delivery use, giving the wrong garaging address, not mentioning modifications, setting the agreed value too low and letting cover lapse, often during a switch. Each can turn a routine claim into a reduced payout, a refusal or a personal debt. Most are fixed in a few minutes at renewal.
This is the pillar guide for the claims and sources section. Each mistake links to a detailed guide.
The mistakes and what they can cost
| Mistake | What can happen | Fix |
|---|---|---|
| Relying on CTP only | You pay personally for damage you cause to other vehicles and property | Hold at least third party property cover |
| Regular driver not listed | Unlisted driver excess, reduced claim or refusal | List everyone who regularly drives the car |
| Business, rideshare or delivery use not declared | Claim reduced or refused for that use | Declare the use; check whether the policy covers it |
| Wrong garaging address | Claim reduced or refused as a misrepresentation | Give the address where the car is kept overnight |
| Modifications not declared | Claim reduced; accessories not covered | Declare modifications the insurer asks about |
| Agreed value too low | Underpaid after write-off or theft | Check the value against the market at each renewal |
| Cover lapses during a switch | No cover for a crash on the gap day | Start the new policy before cancelling the old one |
| Missed instalment | Policy cancelled for non-payment | Watch payment dates; ask for hardship help early |
| Admitting fault or settling at the scene | Complicates the insurer's handling | Exchange details; let the insurer decide liability |
| Not reporting an incident | Problems if the other party later claims | Tell the insurer as the policy requires |
Mistake 1: thinking rego means you are insured
Rego includes or requires CTP, which covers injuries to people. It does not pay for the car you hit. Example (illustrative): an at-fault crash causes $11,800 damage to another car plus $1,400 in towing and hire car costs. With CTP only, the driver faces a $13,200 recovery claim. See accidents with an uninsured driver for the other side of this, and the background in CTP vs third party property.
Mistake 2: the wrong people listed
Many households list one adult and let others drive occasionally. If a regular driver is not listed, the insurer may apply an unlisted driver excess, reduce the claim, or refuse it if the insurer would not have offered the policy on those terms. A $1,500 or $2,000 unlisted driver excess on top of the basic and age excesses is common in examples on this site. See misrepresentation and underinsurance.
Mistake 3: rideshare, delivery and business use
Private car policies usually exclude or limit cover when the car is used to carry paying passengers or deliver goods for a fee. If you drive for a rideshare or food delivery platform, tell your insurer and check whether the policy covers it, whether an extra premium applies, or whether you need a specific policy. Platform-provided insurance, where it exists, has its own limits. CTP for rideshare vehicles may also be classed differently in some states; check your state's CTP body.
Mistake 4: underinsuring the car
Choosing the lowest agreed value to save premium can leave thousands of dollars uncovered in a write-off. Illustrative: a car worth $28,000 insured for $23,000 to save $60 a year leaves a $5,000 shortfall after a theft. See agreed value vs market value.
Mistake 5: a gap in cover
Cancelling the old policy before the new one starts, or letting an auto-renewal fail because a card expired, leaves you uninsured. A new policy may also have a waiting period for storm damage if it does not directly replace existing cover. Always start the new policy first.
Mistake 6: what you do at the scene
After a crash:
- Check for injuries and call 000 if anyone is hurt.
- Exchange names, addresses, phone numbers, registration numbers and insurer details with the other driver.
- Take photos of the scene, vehicles and damage, and note witnesses.
- Report to police where your state requires it, for example when someone is injured, a driver does not exchange details, or a vehicle is towed (rules differ by state).
- Do not admit fault or promise payment; your policy may say you must not.
- Contact your insurer as soon as practical.
If anyone is injured, the CTP process applies; see CTP injury claims by state.
Mistake 7: accepting a refusal without question
Insurers must give reasons in writing when they refuse a claim. If you disagree, use the insurer's internal complaints process, then the Australian Financial Complaints Authority, which is free. Many disputes turn on wording and evidence. See disputing a refused claim.
Where to check the rules
All the regulators, CTP bodies and registration agencies are listed in the official sources directory. The interactive renewal checklist covers the checks that prevent most of these mistakes.
When to get professional help
Get advice from a lawyer, ideally one who practises in motor accident or insurance law, if you face a large recovery claim, a serious injury claim, an allegation of fraud or a refusal involving a large amount. Many community legal centres and state legal aid bodies help with insurance and motor vehicle debts. A licensed broker can help find cover after a refusal or cancellation.
Frequently asked questions
Can an insurer cancel my policy for not telling them something?
An insurer's remedies depend on what was said, why and what it would have done if it had known. In some cases it can cancel or avoid the policy. Answer questions accurately and update details when they change.
What if I made an honest mistake on my application?
Tell the insurer as soon as you notice. Correcting it before a claim is far better than having it discovered during one.
Do I need to tell my insurer about a minor bump I paid for myself?
Check the policy. Many require you to report incidents that could lead to a claim, even if you do not claim.
Is it a mistake to choose third party property cover?
Not if it suits your car and finances. The mistake is having no property cover at all.
Sources
- Australian Financial Complaints Authority — free external complaints
- Moneysmart — car insurance guidance
- ASIC — insurance regulation
- Insurance Council of Australia — General Insurance Code of Practice
- National Legal Aid — links to state and territory legal aid commissions
