Car Insurance Australia: What You Need To Know Before Starting
There are companies out there that specialize in segments, like 50’s for comprehensive car insurance. In Australia. Apia, for example, take insurance plans and specialize in over 50’s. This targeting is very useful if you want to get a good, specialized view of what the market has to offer in regards to car insurance in narrow areas.
Of course, this knowledge is useless if you don't know a thing about insurance.
Like what is a plan, and what are the different types in Australia? Do I even need insurance? What is all this talk of “value” and “excess”? And what is this concept of insurance anyway?
Do not be alarmed, because right here is a simple list answering, in the shortest and simplest way possible, are some answers to those pesky questions that are troubling you.
1. What is Car/Vehicle Insurance?
In short, vehicle/car insurance is designed to offer you financial protection against the costs associated with road-related accidents, including health costs (in the case of injury) and/or property damage – assuming you have the right kind of insurance.
2. Do I Need Insurance at all?
Shortest answer, yes. Aside from the fact that there is a mandatory minimum approach that the various state and territory governments enforce, it’s also a great idea to make sure you’re covered in case something does happen. And these things do happen, even to the best of drivers: in July 2015 alone, there were 91 road related deaths – and that isn’t counting the larger number of accidents where people were only injured or escaped unharmed.
There are always risks involved whenever you hop in a car. Insurance can help you to relax a little bit by ensuring that if an accident does occur, you will not be out of pocket for a horrendous amount of money.
3. So What Are My Options?
And this is the big question when it comes to insurance. Before you look into your options in terms of exact plans or companies, it is a good idea to look at the different types that exist, and to know what you're after exactly. There are four primary types:
- The Compulsory Third Party Plan (CTP): although the methods of getting this coverage vary from state to state, the CTP is a mandatory part of all car insurance. In New South Wales, they are colloquially known as “green slips”. CTP plans will cover other people in the event of injury, whether that is another driver, pedestrian, or cyclist – but doesn’t count towards your own health costs (if you are injured and not at fault, you take money from their insurance scheme, and vice versa).
- Third Party Property Coverage: the “next step” in the insurance ladder. In this, the insurance not only covers the other driver’s potential health costs, but the insurance company also covers potential property damage, including damage to their car.
- Third Party Property with Fire and Theft Coverage: these plans not only cover the expenses mentioned above for other people’s property and health costs, but they also cover your car or vehicle if it gets stolen or destroyed/damaged by fire.
- Comprehensive Coverage: These plans cover not only all of other people’s costs, just like the other plans, but the Comprehensive Coverage plans also cover your own costs – regardless of whether you are at fault or not. Furthermore, depending on the plan, they can also cover expenses such as emergency repairs, transportation costs, and damage to your vehicle caused by other drivers.
It ought to be noted that there are other styles of plans that exist out there, but they often vary from state to state, and from company to company, depending on local laws and necessities.
4. What are These “Value” and “Excess” Terms I Keep Hearing?
This is where things can get a bit tricky. There are two types of value: Market Value and Agreed Value.
- Market Value refers to the price of the car at the time of the claim, taking into account the age, distances traveled, etc.
- The Agreed Value refers to the price that the insurer and the car owner agree upon, and is a fixed sum until the insurance is renewed.
So, that’s value done – seems a bit simpler now. But what about “excess”?
Excess is the amount that you, the car owner/driver have to pay if you make a claim. So if you had an excess of say $300, and you had a $700 claim, you would pay the first $300 and the insurer would pick up the rest of the $400.
As something to consider, if you are not the one at fault, you can claim the excess from the other driver – if they have insurance.
There are three types of excess:
- Basic Excess: This is the minimum amount that you are obliged to pay if you make a claim. This amount usually fluctuates depending on the particular plan.
- Voluntary Excess: If you decide to pay more than the basic excess, this is called a Voluntary Excess. Paying this amount should normally lead to a decrease in your premiums.
- Age, or Inexperienced Driver, Excess: When the driver is under 25 years of age, there tends to be a higher level of excess to be paid – whether the driver is the primary driver or an additional one.
So there you have it: a brief summary of all things car insurance related. Now you can go to places such as Apia or whatever your niche, feeling prepared to take on whatever comes your way.
Finding Cheap Auto Insurance Doesn't Have to Be a Hassle
If you are anything like the average car owner, you dread having to buy car insurance. You know you must have a policy to legally drive. The penalties for getting caught driving without proper insurance are simply too high for you to consider not purchasing a policy. However, there are so many options available that it can be overwhelming just searching for the best policies. Use the following guidelines to find cheap auto insurance you can trust.
Learn About Different Types of Insurance
You need to know the difference between basic coverage and full coverage as well as the benefits each type of coverage offers. We have provided general information on our site to help you determine which types of coverage are available for purchase. Most drivers do not need to purchase every option. Consider your personal circumstances to determine which insurance types will provide the best protection for you and your family. For example, if you have excellent health insurance, you may not need to purchase a car insurance policy that includes medical coverage. Paying only for the coverage you need will save you money.
Use Quotes to Compare Rates
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