A Day At The Beach - A Warning On Car Insurance

By Andrew Goode, Mellor Olsson Lawyers

I hope readers were able to take some time off over the Christmas/New Year break although I know many would have been too busy to recharge their batteries.

I spent some time in the Victor Harbor region with family and friends. One morning while surfing at Middleton Bay I looked back to the shore where I had parked my car. Much to my horror it was not there as my car had been stolen. Luckily a friend had driven to the beach in his car and gave me a lift home otherwise I would have been left with only my wetsuit and board. Ah the simple life!

To say it disrupted my holiday break is an understatement. Various things had to be quickly attended to including phone calls to the police, insurers, locksmiths etc. After that I had a read of my insurance policy to ascertain what losses were covered.

The car insurance policy covered theft of the car (subject to exclusions) but not much else. Contents such as glasses, sporting equipment etc were generally excluded. Fortunately my household insurance policy provided cover for most of the contents.

I also had a look to the section of the policy which sets out what is not covered by the exclusion clauses.

My policy had an exclusion clause which said there was no insurance cover in relation to car theft if the vehicle was left unattended and unlocked in a public place.

In my case, although the vehicle was unattended (seeing I was out in the surf) I had locked it, although my attempt to hide the car key was presumably watched by the thieves.

Exclusion clauses are strictly interpreted by the Courts against the party relying on that clause (in this case the insurer).

While my car insurer did not suggest I was not covered for the car theft, there are a number of situations where a car owner might find themselves uninsured if their car was stolen, or at least facing an argument depending on their insurer’s attitude, including:

Filling up your car with petrol, leaving your keys in the ignition, and going into the shop to pay the petrol. It could be argued a service station is not a public place but it’s better to avoid any argument.

Going into the video store to drop off some DVDs and leaving your keys in the ignition because you only expect to be in there for a minute or two.

Dropping in for a quick visit to a friend’s house, leaving your car unlocked on the road while you drop some things off.

Different insurers may adopt different attitudes, and the Courts may also reject exclusion clauses in these situations.

Not all insurance policies will have an exclusion clause like my policy, but I bet they are pretty similar. The safest thing is never to leave your car unlocked in a public (or indeed private) place, including in the above instances. Even leaving your car unlocked in your own driveway might be grounds to exclude liability, depending on the wording of your policy.

As to the best hiding spot for keys, don’t ask me for any tips. If you are swimming or surfing at the beach, the best course is get an extra key cut and keep it on you when you’re in the water.

And boaties, be warned. I expect if a boat was left unattended in a public place (and perhaps even your driveway depending on the policy wording) without a trailer lock or chain, you might be in the same “boat”.

Fortunately the jungle drums in the local surf community put out the word about my car and it was discovered three days later half a mile away in a public car park. The only loss was my mobile phone and a small amount of cash.

As my wife said however, cars can be replaced. Car theft pales into insignificance compared to the injury or death of a loved one.

Needless to say, I am now the proud owner of a waterproof door key, and the person who tipped me off as to the whereabouts of the car got a slab of Coopers Pale Ale.

Details: agoode@mellorolsson.com.au or (08) 8414 3400

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