You’re an individual who enjoys the thrill of riding a 4WD off-road. However, you’re the practical sort who understands the wisdom in having a backup plan to pay for things, should the worst come to worst. 

But remember, that 4WD vehicles have a variety of applications not necessarily conducive to conventional highway driving (such as climbing rocky areas on an incline, or powering through riverbeds). Depending on what the situations are, these small details may prevent you from making a claim!

After reading this guide, you should be a bit more savvy on the kinds of insurance options you need for your 4WD adventurer (and how to get around the pesky red tape).

Is there a difference between 4WD, 4×4 and AWD vehicles?

There are some subtle differences between these vehicle descriptions. Legally, there should be no ramifications for insuring a 4WD versus say, a 4×4 vehicle. The only difference is how the power in a vehicle’s wheels is transmitted.

• 4WD: This means that the vehicle has four wheels that are powered, but does not say how many wheels the vehicle has
• 4×4: This means that the vehicle has four wheels and all four wheels are powered (versus say, a 4×2 where a four-wheeled vehicle only has two powered wheels)
• AWD: This means that a vehicle has power in all its wheels

It should be noted that a vehicle that can transmit power to all of its wheels, isn’t always configured to do so and has options for the driver to transfer energy between two and all four wheels (depending on the situation).

For all intents and purposes, this article will focus on four-wheeled off-road vehicles that have four-powered wheels.

Why should I care about 4WD insurance?

4WD vehicles can be expensive to pay for, should you run into an accident. Remember that you’re bringing a 2-ton piece of machinery out into the outback rolling around in tough dirt, charging up boulders and plowing through (sometimes) very harsh waters. What’s the worst that can happen?

As a rough estimate, keep in mind that the average cost of towing a vehicle for less than 5 kilometers is about A$90, with the price going up to as much as A$450 for 100 kilometers. This doesn’t factor in the class of vehicle you need towed or the repairs that need to happen or even (worst-case scenario) medical costs after.

While not necessarily a ballpark figure, a 4WD insurance plan can cost you as low as A$1,000 a year. So, do yourself a solid and invest a few dollars in a plan now, than risk taking out a loan to pay for accidents later.

What would prevent me from insuring my 4WD?

Certain 4WD vehicle modifications or lack of proper vehicle registration. Other than negligence (or laziness), a legal document called the National Code of Practice for Light Vehicle Construction and Modification, also known as Vehicle Standards Bulletin #14 (VSB 14) outlines the kinds of modifications allowed for a 4WD vehicle to be considered “legal”.

VSB 14 is currently listed as a “live” document, which means that any amendments or additions will be included accordingly. But the document currently has a lot of gray areas that can take hours of deliberation for an individual and their insurance company to decide whether or not a claim can be made on a 4WD vehicle or any of its accessories.

Two Important Provisions of VSB 14

• You can raise the roof height of your vehicle up to a maximum of 2 inches (50mm) from its original height
• You can install larger tires up to a maximum of 2 inches (50mm) and smaller tires up to 1 inch (26mm)  from the factory height.

Many 4WD enthusiasts will have a list of concerns that run deeper and cover more topics regarding vehicle modification than the lean two points made, but generally speaking, suspension and tire modifications can be contentious topics.

When in doubt, seek advice and assistance from licensed engineers. You can also find more information about VSB 14 here.

Rego and CTP Insurance

The “Rego” is a document that registers you as the valid driver and owner of your 4WD vehicle. If buying from another owner, make sure that you transfer the Rego to your name as soon as possible. 

CTP Insurance is a liability-type of insurance which generally covers the cost of damages to a third-party in an accident (liability insurance will be explained later).

Both of these documents are required to legally drive in Australia. You may face difficulty or even be denied filing an insurance claim, if you are caught in an accident without these documents!

So, what exactly does 4WD insurance cover?

Practically the same coverage as standard car insurance plans, only with benefits specific to off-road applications. Comprehensive, collision, and liability are the main insurance coverages available for 4WD insurance plans. Other benefits include total loss replacement, vehicle hire cover, personal effects cover, off-road recovery and emergency repair coverage. Below is a quick list to shed some light on how these options benefit you.

• Comprehensive 

Coverage for damages sustained outside of collision. This insurance reimburses you for any damage to your 4WD caused by falling objects, vandalism or theft (but does not cover the cost of stolen belongings)

• Collision

Coverage for damages from vehicular accidents. This insurance covers repair costs for your vehicle if it gets into a fender-bender with another vehicle

• Liability

Coverage for third-party damages. Similar to CTP, liability covers the damages a third-party may suffer in an accident, but also covers property and legal fees (not just medical)

• Total Loss Replacement 

Totaled vehicle coverage. This coverage gives you enough cash to replace your entire vehicle (or get a vehicle of equal value) if the damage completely totals your 4WD

• Vehicle Hire Cover

Coverage for a temporary vehicle. This coverage provides cash for a rental vehicle while your vehicle gets repaired (length of rental varies per insurance company)

• Personal Effects Cover

Coverage for stolen or damaged belongings. This coverage reimburses you for any personal items lost or damaged in an accident inside the vehicle (does not cover damages to 4WD modifications or accessories)

• Off-Road Recovery

Coverage for stalled vehicles. If your 4WD is unable to move because of a mechanical failure, gets stuck in immoveable terrain, or just needs towing or a winch service, this insurance covers said expenses

• Emergency Repair Coverage

Coverage for quick fixes. If your vehicle needs emergency repairs to get it running long enough to make it to a service station, this insurance covers it

Always read the Product Disclosure Statement (PDS) of an insurance company when looking at insurance benefits. While companies may offer a wide variety of benefits, many of them require certain conditions and parameters to be met or followed before they are able to dispense payment.

In relation to off-road 4WD vehicles, check to see if your vehicle modifications are covered and double-check to see if your vehicle is covered on off-road terrain.

If you’re unsure about a company’s benefits, don’t be afraid to ask. Stick it to the man and be clear about what your concerns are; the coverage is there to help you out, but companies won’t hesitate to tear up your contract if you don’t follow their rules.

Do auto club memberships provide 4WD insurance?

You can avail of complementary 4WD insurance from some auto clubs in Australia. Just remember that the 4WD insurance you get from auto clubs may require successful Premier Club membership applications, and may not be as customizable as standalone 4WD insurance policies.

It can be a cheaper alternative and most auto club memberships come with benefits and discounts outside of 4WD insurance, but remember that you also pay for membership fees, so weigh your options.

Do I pay for a policy on an “agreed” or “market value” basis?

Market-value policies are more cost-effective, but agreed-value policies provide more guarantees. A “market value” policy means that a company insures your 4WD and comes up with an estimate for your premium based on how much your vehicle is worth on the market in the time period before you get involved in an accident. An “agreed value” policy happens when the company and the vehicle owner reach an agreement on how much the premiums will be worth on the policy (the minimum premium amount will still be based upon the market value of the vehicle at the time of signing).

Purchase a Market Value Policy if,

• You’re on a budget or prefer paying lower premiums
• You don’t mind insurance payouts that have no guaranteed or set amounts
• Your 4WD is old or has few to no modifications (mods generally do not affect a car’s market value)

Purchase an Agreed Value Policy if,

• Paying for higher premiums is not an issue
• You prefer guaranteed compensation amounts (and flexibility in determining how much you think is necessary)
• Your vehicle is new or heavily modified (modification costs can be taken into account with agreed value policies)

What’s a good 4WD insurance company to check out?

Club 4×4 is a relatively new insurance company specializing in 4WD insurance. Setup by 4WD off-road enthusiasts, Club 4×4 purportedly offers:

• Higher 4WD coverage amounts
• Excellent customer service
• Excellent user reviews
• Well-informed and experienced agents
• Coverage for camping gear, and
• Better coverage for 4WD modifications and accessories

Be smart, get covered! Take some time to study and customize your insurance plan, and happy offroading!