Breaking driver licence conditions
Your car insurance claim can be declined if you drive outside the conditions of your licence. Read this guide to find out what you need to do to meet your insurance obligations.
To drive a car in New Zealand, you need a valid licence. Some licences have conditions you need to follow while you are driving. For example, a driver with a learner licence must always have a supervisor sitting in the front passenger seat. These conditions are known as “driver licence conditions”. Driving outside the conditions of your licence is illegal.
Car insurance policies do not usually cover claims for loss or damage caused while the driver is driving outside the conditions of their licence. One reason for this is because driving outside the conditions of your licence is likely to increase the risk of an accident.
If your insured car is damaged in an accident, you expect you will be covered. However, the circumstances of the accident are important. If the accident happened while you were not following the conditions of your licence, your insurer will likely decline the claim. This means you may need to pay to repair your own car as well as pay for any damage to another car.
Simon flipped his parents’ car
Simon* flipped his parents’ car after being distracted by a gearbox noise and veering to the side of the road. Simon had a restricted driver licence and his passenger did not hold a full driver licence. The insurer declined the claim because Simon was driving outside the conditions of his restricted licence. Simon’s parents said that driving outside the conditions of his licence did not cause or contribute to the accident. However, the IFSO Scheme agreed the insurer could decline the claim. The available information supported the view that a suitably qualified supervisor could have helped prevent the accident.
Karl’s learner licence accident
Karl* crashed after travelling at a high speed through the Remutaka Ranges. Karl went around an advised 30 kph corner at 60-70 kph. Karl had an overseas driver licence and had been issued with a New Zealand learner licence. At the time of the accident, Karl had passengers, but no supervisor – he was driving outside the conditions of his learner licence. The insurer declined the claim. Karl said the lack of a supervisor did not cause or contribute to the accident. However, the IFSO Scheme said a supervisor could have cautioned Karl about his speed and to take care on this hazardous stretch of road, reducing the risk of an accident. The insurer was able to decline the claim.
*Names have been changed
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Types of car licences in New Zealand
In New Zealand, there are three main driver licences:
- Green: this is a full driver licence
- Yellow: this is a restricted driver licence
- Blue: this is a learner driver licence.
There are also pink licences. These are known as limited licences and have specific conditions due to a suspension or disqualification.
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Common conditions for driver licences
The conditions for driver licences are different depending on what licence you have. Check with the New Zealand Transport Authority if you are unsure of the conditions that apply to your licence.
Full licence conditions may include additional requirements for your specific circumstances, like always wearing your glasses while driving.
Restricted licence conditions:
- You can drive on your own, but not between 10pm and 5am. If you drive between these times, you must have a supervisor with you. The New Zealand Transport Authority provides more information about supervisor requirements here.
- If you sit the restricted test in an automatic vehicle, you can only drive automatic vehicles, unless you have a supervisor with you.
- You can't normally carry passengers, unless you have a supervisor with you. The type of passengers you can carry without a supervisor are your partner or children. Full passenger details are available on the New Zealand Transport Authority website.
Learner licence conditions:
- You must not drive alone.
- You must always have a supervisor sitting in the front passenger seat beside you when driving.
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Exclusion for driving outside the conditions of your licence
Car insurance policies generally include an exclusion that the insurer will not provide cover if the person driving the car at the time of the accident was not complying with the conditions of their driver licence.
The exclusion applies even if you didn’t know that the person driving your car was driving outside the conditions of their licence.
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Driving outside the conditions of the licence must have caused or contributed to the accident
If your insurer declines a claim, it must show that the driver was driving outside of the conditions of their licence at the time of the accident.
However, if you are able to show that the breach of driver licence conditions did not cause or contribute to the accident, then the insurer may need to pay the claim.
For example, if the car accident happened because someone reversed into you in a carpark and no driver would be able to avoid the accident, the insurer would probably not be able to rely on any breach of driver licence conditions to decline the claim. Driving outside your licence conditions had no relevance to the accident and how the damaged occurred.
If the accident involves a person driving on a learner or restricted licence without a required supervisor, it will be difficult to show that the lack of supervisor did not cause or contribute to the accident. This is because a supervisor is an experienced driver who can provide guidance and reduce the risk of accidents.
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Relevant factors during a claim assessment
Some factors that could be relevant during a claim assessment include:
- How the accident happened and who, if anyone, was at fault
- The level of experience of the driver
- The available information about how the damage or loss occurred
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My claim has been declined – what do I do now?
You are able to request a review of the claim decision through your insurer’s internal complaints process. If you are unhappy with the complaint response, you can ask the IFSO Scheme to investigate your complaint, for free.
Understand your licence conditions and read your policy
Read your insurance policy and make sure you understand the exclusions that apply when you and others are driving your car. Contact the New Zealand Transport Authority if you are unsure about the conditions in place for your specific driver licence.
Always comply with the conditions of your licence
When you drive, make sure you are driving to the conditions of your licence. This means if you have an accident, there is no risk the claim will be declined because you were not following the conditions of your licence.
Make sure everyone who drives your car knows to follow the conditions of their licence
If other people drive your car, make sure they are aware of the serious consequences of driving outside of the conditions of their licence.