Getting vehicle insurance right

If there’s one asset a builder will always have insured, it’s their work vehicle – and it’s important you have the correct coverage

This month we’re talking about commercial vehicle insurance. We’ve put together some tips below to help ensure you have the right cover and are getting the best value from your policy.

Get your ‘sum insured’ correct

Make sure the ‘sum insured’ for your vehicle is set at an accurate current market value, as this figure is what your premium is based on.

Another reason to make sure it’s correct is because it’s used to determine payouts. More accurately, payouts are calculated based on which of the following is lower: the “sum insured” or the market value of the vehicle at the time of the claim.

Setting your sum insured too high over the vehicle’s market value means you’ll be paying too much, but setting it too low means you’re under-insured.

Try searching Trade Me Motors for a vehicle like yours of a similar age, condition and mileage. The sum insured is your vehicle’s market value excluding GST.

Crack your windscreen coverage

Replacing a broken windscreen is easy when you’re insured. There’s no excess or claim form to complete. Simply take the vehicle in to your nearest Smith & Smith or Novus, along with the name of your insurer and policy number. We recommend you phone ahead with your VIN number, so they can make sure a suitable windscreen is in stock.

Most policies offer unlimited windscreen cover; however, some are limited to one claim per year. Some cover all the glass in your vehicle, including canopies, while others won’t. Double check with your insurer to see what rule applies to you.

Arrange insurance for new vehicles before collection

You should make sure any vehicles are insured before you drive them off the lot, but if you leave it to the last minute you may find yourself wanting.

The best advice is to let your broker or insurer know in advance. If you already have cover in place on another vehicle, the policy may include an ‘additions and deletions’ clause. This means new vehicles will be covered for their market value as long as you tell your insurer within 30 days of the purchase (there may be an additional premium to pay).

Another reason to arrange your insurance early is in the event you need finance. The dealer will want to see an insurance certificate before releasing the vehicle.

Is signwriting covered?

Some policies will automatically include cover for signwriting, but others will only do so if it’s separately noted. Either way, we recommend you check to make sure it’s covered by your policy.

Keep your business on the road

Adding a ‘loss of use’ extension to your policy means you can hire a replacement vehicle while yours is being repaired.

There are conditions, such as extra premium, a stand-down period and maximum hire time, but these costs generally outweigh the inconvenience of being without a vehicle or having to hire one yourself.

Check staff licences

Assuming the apprentice has a licence just because they’re old enough is not good enough. It’s important for insurance purposes because conditions of insurance usually include that the driver has your consent, is legally allowed to drive the vehicle, has a current licence and is not breaching any condition of their licence while driving it.

It’s also sensible from a health and safety perspective. According to ACC: “It is your responsibility as an employer to ensure that any employee who drives any kind of vehicle is legally able to do so. That means they must have the right category of licence and it must be valid (not be suspended, expired or revoked).”

Claims registered too late may be declined

Your insurer may decline a claim if you’ve taken too long to make it. Damage that occurred six months ago may be considered pre-existing and any further loss, such as rust that has set in, may not be covered.

Looking out for number one

While insuring your vehicles and equipment is important, make sure you insure your business’ most important asset: you.

Loss of earnings insurance can broaden your protection to include disability from both illnesses and accidents at little or no extra cost. Another benefit is that your ACC levies will be reduced.

Builtin New Zealand is a specialist in insurance & guarantees for builders & tradespeople. For more information visit www.builtin.co.nz, email Ben Rickard at ben@builtin.co.nz or call him on 0800 BUILTIN.