Travel insurance: Are you really prepared?

By Tony and Denyse Allsop

So the day has arrived for you to head off on that once-in-a-lifetime around Australia trip.

If you are normally a sensible and cautious person who has prepared thoroughly for the journey, you will have also opted to take out various insurance, extended warranty and assistance policies – if you run into trouble on an isolated bit of road, it’s good to have someone a phone call away who can help.

Before you go, however, it’s important to know exactly what your policies offer you in the event of an accident, breakdown or illness.

The cost of roadside calls
If you get stuck somewhere the idea of being able to get anyone on your mobile phone is problematic for a start.

Despite assurances from the telcos that over 90 per cent of Australians have mobile phone access with the CDMA network, once you leave the Eastern coastal highways, areas of mobile reception may be few and far between.

If you are in a disabled vehicle and without a satellite phone, chances are you are going to have to hitch-hike to the nearest mode of communication.

One option with the least positive outcome is sending a message via a passing motorist and waiting by the side of the road, because arranging help is often complicated by lots of financial and practical compromises, and these can often be done only by the individual concerned.

When we had a breakdown the cover we had meant we had to agree over the phone to pay $200 to the tow operator to tow our caravan as well as the car. Then we had to hand over the money before he would hook up the van – fortunately we had the cash on hand that day.

Sometimes when you finally get to a phone, the most difficult decision then is who to call. The Prestige Roadside Assistance we had with our Ford Explorer covered the cost of towing to the nearest Ford dealer (in our case, 450km), but would not cover the cost of towing the caravan.

However, the motoring organisation, RACQ Ultra, would tow our car and van for up to 120km to the attending RACQ contractor’s premises.

Obviously, in the case of a major breakdown far from civilisation, it won’t help to be towed to a nearby service station with very limited repair facilities – a longer tow with the Roadside Assistance program, even paying for the van to be towed, would be a much better option.

This decision has to be made with the initial call, as it is not possible to swap options later, or to use components of the two different systems.

I would like to note, however, that the Ford Roadside Assistance plan on our new vehicle has much less generous towing allowances.

Another area of difficulty is the overlap of responsibility at various State borders. When we broke down near a border, we had to spend an uncomfortable 40 minutes on a mobile phone with one bar of reception and a fading battery.

We were shuffled from one State organisation to the other while they argued about who was responsible for us, and forced to listen to long periods of tinny music while being assured of their interest and concern. I suppose we should have been grateful to have had mobile reception at all!

What’s your limit?
Something not usually discussed is the complicated system of ‘incident’ and ‘annual’ spend limits, and all the various combinations and permutations allowed by the motoring organisation policies. These are obviously affected by the level of cover and the duration of your membership.

If you have a severe, recurrent mechanical problem (in my opinion after one component failure, the likelihood of recurrent problems is increased dramatically by the standard of workmanship in more remote regions), it is relatively easy to reach your annual limit and to have no further claim for the rest of the year.

This is one perceived benefit in having both the Roadside Assistance and motoring organisation policies, as the spend limits apply separately to each of the policies.

The issue of extended vehicle warranties is also a vexatious one. With a new car, it can cost up to $1000 to extend the ‘bumper to bumper’ warranty out to six years.

This can be very valuable in certain circumstances, particularly where there is a major component failure (in our case it was the torque converter), but it can be a game of tactics to achieve the claim.

Prepare to negotiate, and refer the matter to the State service manager if necessary. If calm reason doesn’t prevail, you may have to fight like an angry plover to defend your rights. If you are a couple, it is even more effective to fight in angry-plover relays!

Warranty woes
With normal car and caravan comprehensive insurances and warranties, adherence to correct load limits is becoming very relevant, should it become necessary to make a claim.

It is up to caravanners to make sure they remain within the car manufacturer’s maximum towing and towball limits and to check the weight of the loaded caravan before setting out on a trip. All insurance policies have a similiar type of wording to say that the insured must obey laws or regulations that safeguard people or property.

With large warranty jobs, it is often necessary for the van to be returned to the manufacturer, and it is easy for them to weigh the van when it arrives back at the factory.

Caravans have the maximum loaded weight (ATM) written on the VIN plate and you may see signs such as “Overloading of this van may affect the warranty”.

We all know of vans that are so grossly overloaded or badly loaded to adversely affect their safe performance on the highways; increasingly common roadside checks by registration authorities at weighbridges should help address this problem over time.

While it is clear that there are some benefits in having the types of cover mentioned above, you need to understand the types of assistance they can afford to you.

As with any form of insurance, it is very important to read the fine print and think carefully about what you have read, and how it is likely to apply in certain scenarios, so that you have realistic expectations.

Do not accept reassurances from the sales staff that the caravan is ‘covered’ without fully understanding what this means.

Before you leave home make sure everything is up to date and take copies of policy numbers, etc, with you so you can be helped quickly if need be. 

Since the Financial Services Reform Act came into play a company cannot change wording in a policy without advising the customer.

While on the subject of changes to insurance policies, our retirement village contents insurer recently reduced the (previously unlimited) allowable period of absence from home to 90 days, which can certainly have an effect on planned, extended interstate caravan trips – there’s another case where it pays to check the fine print.

As with all types of insurance, it’s best when you do not have to lodge a claim at all. With thorough vehicle and caravan preparation, it should be possible to enjoy trouble-free motoring, and to arrive back home with the paperwork for these policies still safely stowed away in the place where you first packed them.