Does Car Insurance Cover Pothole Damage in Victoria? What You Need to Know

Gippsland drivers regularly face the risk of pothole damage due to deteriorating regional roads. According to a recent RACV survey, 64% of regional motorists consider potholes their top road safety concern.

The real cost of pothole damage in Gippsland is frightening.

But does your car insurance policy cover the costly repairs caused by potholes? Understanding your coverage is crucial to avoid unexpected expenses. Here’s a clear guide to navigating pothole damage claims with your insurer in Victoria.

Comprehensive vs Third-Party: Which Policies Pay for Pothole Damage?

Car insurance policies fall broadly into two categories: comprehensive and third-party.

  • Comprehensive insurance covers damage to your vehicle from various incidents, including potholes.
  • Third-party insurance, however, typically only covers damage you cause to other vehicles and property, excluding pothole impacts to your car.

To claim pothole damage, you’ll need comprehensive insurance.

How Insurers Classify Pothole Strikes (Collision / Impact)

Insurance companies generally treat pothole incidents as collisions or impacts. Here’s how major insurers in Victoria phrase their coverage:

  • RACV: Covers losses caused by “an accident including a collision.”
  • AAMI: Lists “impact damage” as an insured event.
  • Allianz: Offers coverage for “collision or impact” damage, explicitly including road hazards.
  • Budget Direct: Confirms that pothole impacts fall under collision and impact cover, subject to assessment by their approved repairer.

Always review your policy’s Product Disclosure Statement (PDS) to confirm specific details.

What Will You Pay Out of Pocket? Excesses & Premium Impact

Even if your pothole damage is covered, you’ll still typically pay an insurance excess, ranging from $600–$1,000. Additional excesses for younger or inexperienced drivers might also apply.

According to ASIC’s MoneySmart, frequent small claims could reduce your no-claim bonus and increase future premiums. For example, repairing suspension damage costing around $1,200 may be worthwhile claiming if your excess is $750. However, if your excess is high or the repair is minor, paying privately may save money long-term.

You can also look to make a claim directly with VicRoads. Learn more about potholes and VicRoads here.

Should You Claim or Pay Yourself?

Deciding to claim insurance or handle the cost yourself depends on:

  • Total repair costs versus your excess
  • Impact on your no-claim bonus
  • Potential premium increases

If you’re unsure, a detailed inspection and repair quote from a trusted repairer like CPK McLaren can clarify your decision.

Subrogation: How Insurers Chase VicRoads

Insurers commonly exercise their right of subrogation, meaning they recover the cost of your repairs from third parties like VicRoads if negligence can be proven. VicRoads’ claims process, governed by the Road Management Act 2004, sets a damage threshold of $1,640 for accepting claims. If your damage exceeds this threshold, your insurer may attempt to recover costs from VicRoads directly, potentially limiting your financial burden.

Step-by-Step: Filing a Pothole Damage Claim with Your Insurer

Follow these clear steps to ensure a smooth insurance claim:

  1. Document the Damage: Take clear photos of the pothole, surrounding road, and vehicle damage.
  2. Obtain a Repair Quote: Secure an itemised estimate from a reputable repairer such as CPK McLaren.
  3. Lodge Your Claim: Contact your insurer online or via phone, providing all necessary documentation.
  4. Assessment and Repair: Your insurer arranges an assessor’s visit or directs you to an approved repairer.
  5. Pay Your Excess: Settle your excess payment directly with the repairer once repairs are completed.

Alternatives if Your Claim Is Rejected or Not Worthwhile

If your insurance claim isn’t viable or is rejected, consider:

  • Filing a claim directly with VicRoads or your local council.
  • Paying out-of-pocket and retaining receipts for future potential claims.
  • Seeking legal advice for substantial damages.

Get an Insurance-Ready Assessment Today

Take the hassle out of your insurance claim. Book your inspection with CPK McLaren today. Assessment fees are credited towards your repair, ensuring transparency and convenience.

FAQs

Will my comprehensive policy definitely cover pothole damage?
Coverage typically includes pothole damage under “impact” or “collision” clauses, but always check your specific policy wording.

Does claiming affect my premium?
Yes, making claims can affect your no-claim bonus and potentially raise future premiums, especially with frequent claims.

Can I claim both insurance and VicRoads?
Your insurer may pursue VicRoads through subrogation on your behalf, provided your claim meets VicRoads’ negligence criteria and damage threshold.

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