Is your car roadworthy?

Included in all CTP and comprehensive vehicle insurance policies is a duty of disclosure clause. If a vehicle is not roadworthy, but is claimed to be in a policy, there could be serious ramifications for its owner. If your car is not all you claim, then chances are any other claims you may have to make won't be honoured.

What is duty of disclosure?

Essentially, the duty of disclosure is included in all policies to make sure all policy-holders are being honest with the insurer about the state of their vehicle. For instance, if Sam takes out a policy on his 1994 Mitsubishi sedan without disclosing the modifications he has made to the engine, he may not be covered in the case of an accident.

Duty of disclosure can include all information asked about the drivers of a particular vehicle and any information that is specifically asked when applying for a policy. This information not only affects the cost of your policy and any special provisions that may be applied, but also whether or not your vehicle will even be insured.

In extreme cases, failure to disclose can be treated as fraud, in which case the insurance company may act as if the policy does not even exist, or legal action can be taken.

Test your vehicle's roadworthiness: A checklist

Below are the main areas that should be in a good state of repair on any vehicle. Although NSW law requires any vehicle to be inspected for roadworthiness each year (and variations of this law are in place in other states), it doesn't necessarily mean that all vehicle owners have been honest in the way in which they have received their pink slip. The following checklist is not only important for maintaining your own vehicle, but vital if you are buying or selling a car.

• Engine number/VIN number - make sure that neither of these has been interfered with. Not only could it cause major problems for your insurance policy, but could see you wind up with a stolen vehicle
• Engine appearance - a build-up of excess dirt and oil could be a sign of poor maintenance and mechanical problems
• Engine oil - while dirty and thick oil indicates poor maintenance, milky or grey coloured oil could indicate water in the oil, which is a serious problem
• Engine idle - should be smooth and regular, with no unusual noises such as rattling or knocking
• Oil fumes - removing the oil filler cap while the car is idling will reveal whether or not the car has worn pistons or cylinders. Excess fumes can indicate serious problems
• Radiator coolant - clean coolant is what to look for. The presence of oil in coolant could signify a cracked cylinder head or a leaking gasket
• Check for corrosion or damage to the radiator cooler and core tubes.
• Check there is no battery acid corrosion on the battery mounting platform
• Check for even wear on all tyres - including the spare. Uneven wearing can mean misaligned steering or suspension
• Check oil leaks in the engine, transmission, axles, brakes, power steering and shock absorbers. Any leaking in these areas could indicate a very dangerous vehicle
• Check for excessive noise or fumes from the exhaust
• Check the body of the car for rust, hail damage, loose panels, and firmly closing doors, boot and bonnet. Check for variations in paintwork, indicating the car has been in an accident
• Check all seat belts are in good working order and the car is fitted with a working jack and tool kit
• Check all lights both inside and out, as well as all equipment and accessories
• When driving the vehicle, test excessive travel of steering, braking is smooth and in a straight line, the exhaust does not blow blue smoke (indicating oil is burning), the engine runs smoothly in acceleration and idling, the car does not overheat, transmission is smooth and there are no rattles or knocks when going over bumps.