Mozo’s 2021 Road Trip Report: How your car insurance could impact future travel plans

Key report facts:

• When they can hit the open road, Aussies are spending $1,174 during a road trip and travelling almost 4 hours on average.
• 83% of car owners have comprehensive car insurance but 8% dropped it to save money during the pandemic.
• Almost a quarter of drivers never read car insurance terms and conditions, and 16% don’t understand what they are not covered for.
• 4WD adventure parks, failure to name young drivers on a policy and unstrained pets could prove costly if you’re caught out.
• Drivers expect their front-seat co-pilot to play many roles, including navigator (62%), DJ (26%), temperature controller (23%) and vomit cleaner (5%).
  

Prior to the most recent wave of lockdowns, many Australians were taking the chance to explore our own backyard. In a Mozo survey of more than 1,800 Aussie drivers conducted in May 2021, we found around 39% were hitting the holiday road. If this picks back up when restrictions allow, it could deliver an estimated $4.6 billion to regional economies.** 

But some drivers are still failing to read their car insurance fine print. This could be costly if your holiday is interrupted by an accident and you need to claim on your insurance. 

Road trip prep, why it’s important 

To the inexperienced, a road trip might seem easy – just sling your gear into the boot and head off. But beyond navigating current Covid travel restrictions, there is a lot to remember before you begin exploring the great outdoors. For instance, can any old licenced driver get behind the wheel? Can you bring the dog along in the car? And are you covered for roadside assistance? 

Not having the right car insurance could see road trippers in for some potentially hefty costs. Mozo’s research found that, while 83% of people do have comprehensive car insurance, 8% dropped it during the pandemic to save money. 

More alarmingly, our study found 24% never read the terms and conditions on car insurance policies and 16% don’t understand what their cover excludes.

“With travel during Covid always challenging, you don’t want to complicate it further on a road trip by failing to read car insurance fine print,” Mozo spokesperson Tom Godfrey says. 

“In much the same way you’d take out travel insurance for an international holiday, if you’re hitting the road it’s important to have car insurance and ensure you’re covered for what you’re planning to do.”

This is especially relevant to anyone who moved to a pay-as-you-drive plan or contacted their insurance provider to alter their existing policy during the pandemic, which was about 10% of policyholders according to Mozo’s research. If that sounds like you and you’re dreaming about a road trip, it might be a good idea to get in contact with your provider before scoping out a long-distance journey.

All of this is important for those Australians who are investing a fair few dollars into their road trip adventures. Mozo's survey found that, on average, road trippers are spending $1,174 while driving through regional areas. That’s a pretty big chunk of change that could get even bigger with an unwanted car repair bill. 

For this reason, Godfrey says finding the right insurance policy for you and your car is one of the first things you should tick-off your regional road trip to-do list.

Wrong way down a one-way street: What might void your car insurance or bump up your excess? 

Car insurance can be a complicated beast. Between policy exclusions, limits, optional extras, additional excesses and all the fine print in product disclosure statements (PDS), it can be easy to misunderstand what events and circumstances you’re actually covered for.

Mozo’s research shows some drivers could be making costly mistakes by not understanding some common comprehensive car insurance exclusions, not knowing what could result in additional excesses at claim time, and legal requirements that – if not followed – could void your car insurance entirely. 

Let’s consider pets: our survey found 17% of people travel with their dog unrestrained in the car. Depending on which state you’re driving in, cruising around with your four-legged pal loose in the car can be illegal.

Whether Fido is roaming around in the back seat, loose in a ute tray or sitting on your lap, you could face significant fines. Pet owners could also see jail time and larger fines issued under the Prevention of Cruelty to Animals Act if an animal is injured as a result of being unrestrained while driving. This could all come alongside your car insurance being voided, as most policies will have an exclusion around illegal use of the vehicle, which this behaviour could fall under.

Similarly, it’s illegal to overload a car or trailer and exceed the maximum weight limit set by the manufacturer. So, if you have an accident on your road trip with an overstuffed vehicle, your car insurance claim could be rejected. This could be a problem for the 6% of our survey respondents who said they tow a trailer but don’t know the towing capacity or overload it with heavy items. 

While it’s not illegal to let younger licenced drivers have a go behind the wheel on a long road trip, consider how this could affect your car insurance. 

If you hold a policy with age restrictions on younger drivers like some seniors car insurance policies, then those more junior drivers may not be covered and the insurance company may deny your claim since you’re not following the terms and conditions in your policy. But if your policy doesn’t have young driver restrictions, then it’s your excess (the agreed sum you pay when you make a claim before cover kicks in) that’s more commonly affected. 

Some policies will add on additional excesses for young drivers under 25 and people not listed on your policy. If you add these charges together, you could be looking at an excess sitting thousands of dollars higher than the basic level. Of course, if you’re in this age bracket or have drivers listed who are, it may still be worth the higher excess if it means everyone is appropriately covered. Just remember, you’ll need to budget for that higher excess if you make a claim, and the additional cost may even result in the claim not being worth the pay-out.

It seems most Aussie parents are remaining cautious in this area, with only 9% allowing drivers under 25 in their family to drive their car without being named on the insurance policy. 

But not every holidaymaker is being so vigilant about car insurance. Mozo’s survey found 15% of people regularly take their car to four-wheel drive adventure parks and assumed their insurance would cover it if anything went wrong.

While some insurance policies do cover off-road driving, many will exclude driving on test tracks or parks, as these are generally designed to test a vehicle’s 4WD capability and have greater potential for accidents that insurance companies aren’t willing to risk. The same usually goes for any kind of sport-related driving.

At the end of the day, if you’re planning any kind of unusual recreational activities, it could pay to double check what’s covered with your car insurance provider before hitting the open road.

Need a tow? Why roadside assistance isn’t always included in car insurance

Seeing smoke billowing from the hood or failing to crank the car battery to life are road trip nightmares. That’s why many drivers – 71% according to Mozo’s survey – have roadside assistance.

While your comprehensive car insurance may cover things like towing to a mechanic or emergency repairs, travel and accommodation, it generally doesn’t apply to mechanical breakdowns or failures. This is where roadside assistance comes in. Engine experts can walk you through things like tyre changes or come to the rescue with extra fuel if you’re running on fumes.

These policies work hand-in-hand, but you usually won’t find roadside assistance included in your car insurance as standard. Across all the policies in Mozo’s database, only one policy (Youi’s Comprehensive Car Insurance) has roadside assistance as a standard inclusion.

However, many insurance providers offer it as an optional extra you can add to your policy for an additional fee. Other providers and independent services sell it as a totally separate product you can purchase without already being an insurance customer. 

A recent CHOICE report found roadside assistance policies you add onto car insurance cost on average between $81 and $92 annually, while independent policies range from $69 to $360 a year, depending on the features you’re after. 

Some drivers may not be willing to add this extra cost to their car insurance budget, potentially because features like towing are already included in their comprehensive policies. Or, customers driving longer distances from major towns or cities might not be satisfied with the towing or call-out restrictions which apply to most roadside assistance policies.

Whatever your reasoning, if you decide to not take out roadside assistance, it could help to have some collective mechanical knowledge among your roadtrippers, like how to change a flat tyre or assess what might be the cause of a mechanical fault. 

You’ll also want to check your insurance PDS to see how many kilometres of towing are covered under the policy, plus any restrictions on accommodation cover and potential hire car cover after an insurable incident.

Riding shotgun: What’s required of your front seat rider on a road trip?

When it comes to a long road trip, everyone wants to call, “shotgun”. The front passenger seat is prime real estate in the car, but it does come with a lot of responsibilities. Essentially, if you ride shotgun you are the driver’s second in command.

One of the biggest responsibilities that comes with bagging the front seat is looking after the driver. According to Mozo’s research, 62% of people think the person who rides shotgun should act as navigator. It’s up to this passenger to ensure the person behind the wheel doesn’t take any wrong turns, so you make it to your long-awaited holiday destination.

A further 44% of those surveyed said the person in the front seat should make sure the driver stays awake. It’s fairly clear why this one is important – if the driver nods off you could have a collision. Even if no one is hurt, a minor scrape will still go on the driver’s history and could up their car insurance.

As well as falling asleep at the wheel, bickering children in the backseat could also be a dangerous distraction for drivers. A quarter of people surveyed seem to agree with this, saying that stopping kids from fighting in the back should be on the front passenger’s list of duties. 

Speaking of kids, the front seat passenger might also want to make sure everyone has their seatbelt on. In all states and territories in Australia not wearing a seatbelt is an offence. 

If a driver or any passengers are caught not wearing one, they will be given a fine which varies across states and territories. The driver may also accrue demerit points on their licence if anyone is caught not wearing a seatbelt. Having demerit points is a big deal, as they can affect what the driver pays for their insurance premium.

With all this in mind it’s pretty clear that riding shotgun involves more than just getting a great view and being in control of the tunes. The front seat passenger is the driver’s left-hand-person-in-command and they have a lot of important responsibilities!

The right car insurance for your road trip

Want to make sure you have the right car insurance for your road trip adventure? Head to Mozo’s compare comprehensive car insurance page for more information on what different policies cover. Then, check out the best car insurance policies as crowned in the Mozo Experts Choice Awards.^

This report was a collaboration between Mozo money writers, Olivia Gee and Tara McCabe.

**39% of respondents reported road trips in the previous 12 months, with an average spend of $1,174. The $4.6 billion in regional spending was calculated by this percentage against the total estimated number of Australian households (10,100,000).