In the bag? - Car insurance and the Takata airbag recall

Following the death of a Cabramatta motorist in July 2017 after the deployment of a faulty Takata airbag during an accident just days before his inflator was due to be replaced, the enormity of one of Australia’s biggest automotive recalls began to hit home.

Although the first vehicles with faulty Takata airbags were recalled as far back as 2009, car companies continue to add models to the recall list and many Aussies have been left fighting for compensation. With the ACCC’s latest figures showing there’s still 912,000* vehicles with faulty airbags that need replacement, many car owners will be wondering where they stand with their car insurance.  

To help motorists navigate the Takata airbag recall when it comes to their car insurance, Mozo reviewed the product disclosure statements from 49 insurers covering 58 car insurance policies. We also called the insurers twice between December 2018 and February 2019 to find out what potential customers were being told when seeking to get insurance for a vehicle with a faulty airbag. Critically, we wanted to determine whether or not a motorist would still be covered in the event of an accident.

After reviewing the product disclosure statements it was clear that a number of insurers will refuse to cover drivers who fail to respond to Takata airbag recall, leaving them high and dry in the event of an accident. Here are the critical clauses from the disclosure statements for each of the 49 insurers:


UPDATE 4/3/19: The above table has been updated, following clarification from a number of insurers around their position on recall notices. To determine your individual circumstances, please contact your insurer.

We based our research on a review of the product disclosure statements, as well as mystery shops that we conducted over the phone on two separate occasions. Keep in mind the an insurance PDS can be open to interpretation, so wherever your insurer falls on this list, you should take steps to be clear on what coverage you have. If your car is affected, be sure to call your insurer to check on coverage, and if they say you're covered when your PDS says otherwise, make sure you get it in writing so you have something to refer to if you do have to make a claim.

*UPDATE 27/3/19: Since publication, Comminsure has been in touch with Mozo to clarify its position on the Takata airbag recall. Representatives said that drivers with faulty airbags will be covered by their Comminsure comprehensive car insurance.

*UPDATE 1/3/19: Since publication, Suncorp has been in touch with Mozo to clarify its position on the Takata airbag recall. Representatives said that, 

"When requesting a car insurance quote from any Suncorp Group motor brand you are asked if your vehicle is considered roadworthy by the relevant state or territory regulator, as we only offer cover to roadworthy vehicles.  For existing customers who have the recalled ‘alpha’ airbags in a roadworthy vehicle, we can’t deny a claim if the airbag wasn’t the cause of the accident."

*Update 6/3/19: Since publication, RACQ has been in touch with Mozo to clarify its position on the Takata airbag recall. Representatives said that "...our claims process would not refuse to indemnify an insured based on the airbag not having been replaced."

Is my vehicle roadworthy? What the state and territory regulators say

Many insurers require you vehicle to be considered “roadworthy” by a state or territory regulator for your policy to be valid. So it’s important to know that some state and territory regulators may deem vehicles with recalled “alpha” airbags unroadworthy. To help motorists navigate this complex issue, Mozo contacted the state and territory regulators to find out where you stand. Here are the official statements from the regulators:


A spokesperson for NSW Roads and Maritime Services says they are “...responsible for ensuring vehicles comply with relevant safety standards and are roadworthy for use on NSW roads. Components such as airbags, which cannot be tested, are currently not part of roadworthy checks.”

Western Australia

A spokesperson for the WA Department of Transport (DOT) says, “on 10 August DoT began writing to owners of vehicles identified as still being fitted with ‘Alpha’ airbags warning them not to drive the vehicles. The letter also explained how to contact their particular manufacturer for free airbag replacement and advised that the DoT will be considering the use of its powers to prevent the vehicle being used on WA roads. Alternatively DoT may suspend or cancel the vehicle licence if a responsible person for the vehicle does not have the faulty airbag replaced.”


In Victoria a vehicle is still considered roadworthy even if the owner has not responded to the airbag recall notice. According to Roger Chao, Director Road User and Vehicle Access, VicRoads, “we are continuing to work closely with the ACCC and other States and Territories to assist manufacturers in contacting owners of affected vehicles.”


In Queensland a spokesperson for Transport and Main Roads, says “vehicles fitted with the beta Takata airbags are not considered unroadworthy, however vehicles with the alpha type Takata airbags are high-risk and considered unroadworthy... failure to comply with the defect notice may result in cancellation of registration for the vehicle.”   

South Australia

In South Australia the department is refusing to renew registrations on the grounds that a vehicle fitted with a defective alpha airbag would, if driven on the road, put the safety of people using the road at risk.

Northern Territory

The North Territory’s Department of Infrastructure Planning and Logistics did not confirm whether or not a vehicle with a faulty Takata airbag would be considered roadworthy but they directed us to a website which states “the highest risk ‘alpha’ airbags must be replaced immediately.”


In the ACT Access Canberra stated, “the Takata airbag recall does not automatically make the vehicle unregisterable under state or territory transport laws… state and territory registration authorities are considering vehicle registration sanctions for vehicles fitted with high risk defective Takata 'alpha' airbag inflators.”


Martin Crane from the Department of State Growth says, “I have formed the view that a vehicle with an 'alpha airbag' is no longer eligible for registration on the grounds that it is not roadworthy and is suspending the registration of affected vehicles that have not been fixed. Tasmania was the first state or territory in Australia to act to suspend the registration of vehicles still fitted with a Takata alpha type airbags.”

Car insurance mystery shop

Mozo conducted two separate phone mystery shops of the 49 insurers posing as a potential customer to ask if a vehicle with a faulty airbag would be covered. Worryingly, the responses given to the mystery shopper over the phone often contradicted the written product disclosure statements. Regardless of what you are told over the phone, it’s critical that you have an understanding of how car insurance works generally, then check the product disclosure statement for your individual policy and find out if you’re covered or not.

Is your vehicle impacted?

Chances are your vehicle will be caught up in the Takata airbag recall. According to the ACCC, 1 in 4 vehicles is impacted with most car brands having at least one model on the recall list. The regulators latest figures show that 2.8 million faulty airbags have been replaced but 1 million are still out there. Worryingly, 7,800 of the highly dangerous ‘alpha’ airbags are still on the road.

Why act now?

24 people have already been killed and 300 injured** around the world by dodgy Takata airbags, so with some insurers refusing coverage if you don’t take action and some regulators likely to deem vehicles unroadworthy, it pays to check to see if your vehicle is caught up in the recall.

Tips for navigating car insurance and the Takata airbag recall

  • Check or to see if your car is caught up in a recall. If it is, it’s a good idea to take action now, rather than down the line when it’s an emergency.

  • Check your car insurance policy’s product disclosure statement to find out what it says about recalls.

  • Act quickly to get your faulty airbag fixed to help ensure you are covered. Remember, whatever stance your state and car insurer take on the recalled airbags, it’s much safer to just get them fixed.

  • Keep a record of the steps you’ve taken and what you’ve done to get your faulty airbag fixed. That way, if you are in an accident before you manage to fix the airbags, you can prove that you’ve attempted to fix the problem and make your car safe again.

  • If you don’t have comprehensive car insurance consider getting it now! Think of this as a wake up call and take a look into the benefits of comprehensive car insurance.

Notes: Mozo reviewed product disclosure statements from 49 insurers in January 2018. The two phone mystery shops were conducted in December 2018 and January 2019.



* Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.

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