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Car Insurance

published  First Published: 24/05/2011
Article written by: Nigel Brookson


Car insurance is a legal requirement when driving on Australian roads. Everyone that drives a car in Australia either has car insurance at the time of registering their car or purchases a car insurance policy from a car insurance company afterwards.

There are four different types of car insurance available in Australia, so to understand which one is going to suit you and your requirements the best, it is important to read about the car insurance options so you can make an informed decision. It is recommended you make a car insurance comparison with several car insurance companies Australia wide by obtaining car insurance quotes from them first before making that decision, and read the product disclosure statements (PDS) each insurer supplies.

Car insurance options

Compulsory third party insurance - bodily injury only

Compulsory third party insurance (CTP) is the minimum level of cover that everyone has when registered to drive on roads in Australia. Compulsory third party insurance covers compensation to crash victims where the owner or driver of a registered Australian vehicle is at fault and may also cover crash victims where a passenger is at fault as well. With compulsory third party insurance you are not covered for damage to property you may have caused. In NSW compulsory third party car insurance is called green slip insurance, and must be taken out prior to registering your car.

Third party insurance - third party property damage insurance

Third party property damage insurance covers you for damage caused by your car to property owned by a third party in the event of an accident. That means you're covered for any damage you may accidentally cause to someone else's property; up to $20 million for many insurance companies in Australia. Third party property damage insurance also covers you in the event your car is damaged by an uninsured motorist with most insurance companies Australia has usually in the amount of up to $3,000 damage caused.

Third party fire and theft insurance

Third party fire and theft insurance is available by paying slightly more, and covers loss or damage to your car caused by fire, theft or attempted theft. Third party fire and theft insurance cover is an extra, so you are also covered for third party damage insurance.

As is also the case with third party property damage insurance, the inclusions, exclusions, benefits and costs of third party fire and theft insurance will vary from insurance company to insurance company Australia wide, so compare insurance companies before making a decision.

Comprehensive car insurance

Comprehensive car insurance as the name suggests offers by far the most comprehensive insurance cover of the car insurance products available in Australia. This is also where it pays not only to understand what is included in each policy the different car insurance companies have on offer, but what is not covered as well; apart from the cost of the comprehensive car insurance premium.

With comprehensive car insurance if your vehicle is accidentally damaged, stolen or burnt anywhere in Australia, the insurance company will at their option, either repair the car, pay you the cost of repairing your car or pay you the agreed value or market value of your car. Comprehensive car insurance offered by insurance companies also covers the benefits, conditions and exclusions that are covered under third party property insurance and third party fire and theft insurance.

What is not covered by car insurance

Even comprehensive car insurance does not cover everything that can go wrong with your car. The following is a list of things that insurance companies will not cover as part of any car insurance product.

  • the reduced value of your car after it has been damaged and repaired and the repairs have been properly performed
  • repairs carried out without the insurance company insuring you supplying written consent
  • personal items stolen from your car, other than what is covered under the policy
  • repair or replacement of a whole set, for example, set of 4 wheels, where the loss or damage is to part of a set; i.e. 1 or 2
  • loss of any income because you cannot use your car
  • depreciation, wear, tear, rust or corrosion
  • mechanical, structural, electrical, electronic or other failure or breakdown (a new or used car warranty is a product that may cover you for this)
  • any additional loss or damage to your car as a result of it being driven after an accident
  • loss or damage caused by failure to take reasonable steps to secure your car after it has broken down, been damaged in an accident or you have been notified of its recovery after it was stolen
  • damage to your tyres caused by braking or by damage from the road including punctures
  • loss or damage caused deliberately by you or a person acting with your express or implied direction
  • loss or damage caused when someone drives your car after they have received medical advice that their ability to drive it is impaired by their condition or medical treatment
  • loss or damage caused by the lawful repossession or lawful possession of your car
  • loss or damage directly or indirectly caused by or arising from, or connected with asbestos, asbestos fibres, or derivatives of asbestos in any form
  • any war, warlike activities or revolution including any looting or pillaging and including any act of terrorism
  • the use, misuse or existence of nuclear weapons; or the use, misuse, escape or existence of nuclear fuel, waste or nuclear materials or ionising radiation or contamination from such fuels, waste or materials; or combustion, detonation, fission and/or fusion of nuclear fuel or nuclear materials
  • actual or threatened chemical or biological pollution or contamination; or action taken by a public authority or any body authorised by a public authority to prevent, limit or remedy such actual or threatened release, pollution or contamination

What level of car insurance should I have?

The simple answer to this question is the highest level of cover that you can afford. It is worth knowing that most insurance companies give you the option of paying your car insurance premium monthly making comprehensive car insurance more affordable, especially for younger drivers who will generally have larger car insurance premiums to pay.



Related Article: Compulsory Third Party Insurance, Comprehensive Car Insurance, Car Insurance Tips & Advice


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