A number of Australian motorists may be absorbing unnecessary costs following not-at-fault motor accidents, with an expert pointing to a lack of understanding around how policies handle such claims.
Drivers involved in incidents where they are not liable may still be paying insurance excess fees or facing concerns over premium increases, largely due to uncertainty about policy conditions and claims procedures.
Nicolas Rio, chief of growth at vehicle replacement provider Right2Drive, said confusion about how insurers treat not-at-fault claims is contributing to financial strain for some customers.
“A lot of drivers often assume that they must pay excess up front, or that their premiums will go up even if they were not at fault after a car accident, but this is not always the case,” he said. “A lack of awareness around claims policies can leave drivers out of pocket, and not only can this lead to financial stress, but it can also put off not-at-fault drivers from making valid claims or accessing support for an accident replacement vehicle at no cost to them.”
In cases where another party is clearly at fault and has insurance, the not-at-fault driver may have the option to file a claim directly through the other party’s insurer. This route often allows drivers to avoid claiming on their own policies altogether.
This approach, however, is dependent on collecting key information at the accident scene – such as the other driver’s contact details, insurance provider, and evidence of damage – to support the third-party claim.
Motor insurance policies can include various types of excess – such as standard, age-based, or unlisted driver excess – and these charges are not automatically waived, even for not-at-fault incidents.
Policyholders are advised to review their product disclosure statements and confirm whether excess charges apply in different scenarios. Some insurers may waive the fee if liability is clearly attributed to another party and supporting documentation is supplied.
Rio added that direct communication with insurers is essential.
Some insurers may request payment of an excess up front and issue a refund later, pending confirmation of fault. Delays in determining liability may slow this process, so policyholders are encouraged to clarify timelines and conditions with their insurer.
Concerns about premium increases are another reason some drivers hesitate to lodge not-at-fault claims. However, according to Rio, premiums are not automatically affected in these circumstances.
Separately, a recent survey by iSelect suggests that a proportion of drivers are knowingly providing inaccurate information when applying for insurance, a trend that may pose additional risk to insurers.
In a national poll of over 3,000 drivers, 6.8% admitted to entering false information to reduce premiums. The most common misrepresentations included parking arrangements, estimated driving distances, and the intended use of the vehicle.
Younger drivers were the most likely to report this behaviour, with 15.4% of respondents aged 18 to 24 acknowledging inaccuracies, compared with just 1.4% among drivers over 65. By region, New South Wales reported the highest rate of inaccurate disclosures at 7.9%.
Adrian Bennett, general manager for general insurance at iSelect, said policyholders should be aware of the potential consequences.
“While it may be tempting to misrepresent details such as your car’s parking location or annual mileage to lower insurance premiums, doing so can have serious consequences that may end up costing you more in the future. If an insurer discovers false information, they may cancel your policy or deny a claim – leaving you financially responsible,” he said.
