Young drivers who crash while driving in breach of their licence will find their insurance claims turned down, the Insurance and Financial Services Ombudsman has warned.
Ombudsman Karen Stevens said her office frequently received complaints about declined claims involving accidents where the driver was in breach of their licence.
Common breaches included people with restricted licences driving between 10pm and 5am, or driving with passengers while they did not have supervisor in the car, Stevens said.
Often it was the driver's parents who owned and insured the car. "We hear from many parents who have had to pay for the damage, not only to their own car, but to another car, because their son or daughter was driving outside the conditions of their licence when an accident occurred."
Car insurance covers the cost of damage to the insured vehicle, but also damage caused to other people's property
Policies usually specifically exclude cover for damage caused if an accident occurs while the driver is in breach of their licence. In some complaints people claimed the breach of licence did not cause the accident. In those cases, the insurer should pay, Stevens said.
"If the insured can prove that the breach of the licence, most commonly, the absence of a supervisor with a restricted driver, did not cause or even contribute to the accident, then the insurer cannot decline your claim on the basis if this exclusion," she said.
However, it could be difficult to prove that a supervisor would not have helped the driver to avoid the accident.
In extraordinary circumstances, an insurer can show understanding. In one case a young woman crashed while in breach of her restricted licence. She was driving her younger sister and brother to school and told the ombudsman that since the death of her mother, care responsibilities had fallen on her.
The insurer paid the claim, even though it didn't have to.
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