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SA Insurers deduct Reg/CTP refund from payout

Discussion in 'Politics, Laws, Government & Insurance' at netrider.net.au started by SlowRider, Sep 15, 2008.

  1. Howdy,

    I have a question for any legally minded person out there.

    Scenario: Vehicle has been involved in an accident and has been written off. Claim put in with the insurance company. It comes to settlement time and from the Market Value of the vehicle, they deduct:
    - any applicable excess
    - any outstanding premiums
    - any unused portion of the registration/CTP Insurance that you are entitled to.

    I can understand the deduction of excesses and outstanding premiums. However what right do the insurance companies have to deduct from the settlement any refund i will get back from my rego and CTP?
    I know its listed in the policy booklets of pretty much all insurance companies, but i just wondered if anyone knew if there was any legislation allowing this to happen which the insurer would rely upon.

    Any help would be fantastic.

  2. really? Insurance values include those government charges. ie the value of your vehicle includes the cost of getting it on the road (unless you have laid up cover) and is part of the agreed or market value of the vehicle.

    An insurer writing off a vehicle will mean two things:

    1. You give the insurer the title to the bike (unless you specified salvage in your policy contract), all the keys etc.
    2. Insurer sends you money for value.

    Market value of a vehicle includes any registration it has on it.

    This means that the insurer now owns the bike and can reclaim registration costs from the state registration body (if they don't want the bike registered. And they won't because the bike will now be on the repairable write-off or never register again register - they just move the things through wholesale auctions as spare parts anyway).

    I think in this case that the insurer is pulling the wool over your eyes. Since they own the bike under terms of the policy, then they can't deduct registration from what they pay you as you can't claim that because you no longer own the bike.

    What does the fine print of your policy say with regard to this OP? Are you required to cancel registration before handing the bike to the insurer? If so, what they have said for point 3 is true, but insurers normally take care of all of that for you.
  3. When my car was stolen and written off the insurance co
    took ownership of it, and cancelled the rego, and sent me
    a letter saying so which I took to vicroads. Eventually I got
    a cheque from vicroads for the unused portion of the rego/ctp.
    I can't remember 100% if the insurance co held back the
    value of the refund from the payout, but I don't think so.
    However different companies may have different policies.
  4. that's the insurance company's fault. According to vicroads, you are still the registered owner (because the insurance company didn't transfer ownership of registration, only ownership of the vehicle). Thus, if your policy said the same, and your insurer paid you a value that includes the existing pro-rata registration component, then you should legally pay that refund to your insurer. Whether or not they choose to chase you over a few dollars doesn't matter.

    What that clause says is "if by some chance the law says that a payment should go to you, instead of the new owner, then we will simply deduct that refund value from what we pay you."

    It is part of the general rules or laws about duplication. You can't insure something with 10 difference companies and then claim the total value against each policy and end up with 10 times as much as the object was worth. Life insurance might be different, but not for possessions to my knowledge.
  5. I'm curious mate - why do you think you can't insure something for its cost? ie you seem to believe that I can only insure things for their real cost, less import duty, sales tax (GST) and so on.

    Which just isn't true.

    According to the state registration bodies, they will only refund pro-rata portions of registration to the registered operator. Which isn't always the same as the vehicle owner.

    So, the policy clearly states that if you, as the policy holder, are eligible to receive a refund on registration [that the insurance company can't claim on your behalf], then they won't include that in your payout. That has nothing to do with it "being a government charge" otherwise you'd never be able to insure for costs involving stamp duty or GST - both of which we all regularly do insure for, together with the base cost of the vehicle or other product.
  6. For a hyperthetical let's say a written off bike/car is insured for a total value of $10,000.

    According to what's been described....,

    Inurance co deducts:
    Excess $500
    Left over rego $20
    Left over CTP $100

    Vehicle owner recieves:
    $9380 from insurance
    $20 from registration
    $100 from CTP

    All up the owner recieves $9500 which is exactly what they were expecting.

    How can anyone find that unreasonable? :?
  7. I think what the OP is saying is he got $9380 (by way of your example) and the insurance company took the remainder of his rego.

    If that is indeed what he is saying then he's effectively payed for that portion twice. I don't get it.