Every motor insurance policy in Australia carries an exclusion saying that cover does not apply unless the driver has a current driving licence. In 99% of all cases that exclusion cannot be enforced because the Insurance Contracts Act says an insurer cannot invoke such a clause unless it can prove its position was prejudiced. In other parts of the world motor policies state that a current licence must be held or have been held because if a licence has expired by a week or a month it makes no difference to the ability to drive.
This is quite clearly an attempt by the insurance industry to evade claims, knowing that the general public are not aware the wording cannot be enforced. We have encountered several such cases.
It would be a simple matter to change the wording, thus making the position clear and fair for both insurer and insured. This Company has attempted to get the Insurance Council of Australia to act but they say they cannot intervene in the wordings of individual insurance companies. This excuse doesn’t hold water because they have publicly made recommendations for an industry-wide flood wording, so if they could act on one type of cover they could on another; obviously they are acting in the interests of their members.
So – pass this around. This is sharp practice, but the more people are aware of it then the less chance there will be of an insurer getting away with this scam. Times are changing and the consumer is entitled to be warned of these little tricks.