Understanding Car Insurance Coverage


Understanding Car Insurance Coverage

Compulsory third party insurance (CTP) is a type of insurance every Aussie car owner needs.

 

While the process of getting one is typically automatic when you purchase your car in all territories outside of NSW, the type of coverage differs from insurer to insurer.

 

Regardless, having insurance in place is quite important. If your vehicle encounters any mishap, an insurer can help pay out the repair and medical costs associated with the accident. This can be paid in partial or in full.

 

Furthermore, there are also multiple types of insurance policies and agreements that you can make prior to purchasing your policy. Knowing all the nuances of these various car insurance policies can help you weigh the best one for you in terms of value.

 

That said, you may wonder, what encapsulates car insurance coverage anyway?

 

If you're wondering the same thing, you've come to the right place. Ready your learning caps"let's break down the criteria that you can use to distinguish various policies and the various inclusions to consider when choosing a car insurance policy.

How to Compare Car Insurance Policies?

Car insurance policies can vary depending on several bases. You can weigh these factors and choose the one that fits your specific needs the most.

 

Cost

 

The most important one is the cost of the car insurance policy.

 

That said, the cheapest policy an insurer offers is not necessarily the best option. It can be ideal for cars that you couldn't care less about, but if you value your vehicle, then you should consider dishing out additional money to get extra coverage on your insurance policy.

 

However, you can and should vet prices of similar insurance policies from different companies. Review the background of the insurer and understand their claiming process, and make a weighted decision from there.

Payment Scheme

Another factor to keep in mind is the car's insurance payment scheme. Be sure that you're in agreement with the monthly payments and length of the term prescribed in the contract of the insurer.

Special Coverage

Some companies may provide enticing offers on top of their insurance coverage policy to attract a broader range of customers. 

 

You can take advantage of this as a customer"but you'll have to seek and assess various insurers and pick the one that has the additional features that you feel would apply to you the most.

 

For instance, some insurers may provide free roadside assistance on top of their basic plan for their customers. This could be good if you drive in the Outback or rural roads often. Other providers may extend their insurance coverage plan to electric cars like this Tesla car insurance.

 

In short, search around and find the features that appeal to you the most. Also read customer reviews and evaluate if you're willing to take a chance with these car insurers"you definitely don't want to cut costs for your luxury car insurance, for one!

Mandatory Car Insurance Policy Inclusions in Australia

In every Australian territory, there are two mandatory inclusions that car owners need to get when applying for car insurance. These are:

 

  1. Bodily injury liability: This covers the medical costs of you and the other driver in a collision when driving a car. Applicable for injuries and fatalities.
  2. Property damage liability: This covers the reimbursement fee to be paid to the victim of a collision, whether they're a driver of a car or an owner of a property.

In a few states within Australia, you're also required to have the following inclusions in your car insurance policy. 

 

Even if it's not required in your state, having coverage for these is strongly recommended:

 

  1. Personal injury protection: This covers medical expenses for injuries to the car owner and the passengers as well as lost wages.
  2. Uninsured motorist coverage: This covers your medical bills when an uninsured driver collides with you and lacks coverage.

 

There are other types of inclusions that you can avail for greater financial protection. These are not legally mandated, but they're great to have in case you find yourself in these situations.

Additional Car Insurance Inclusions

Besides the aforementioned mandatory insurance coverage, there are a couple of other inclusions that insurers can cover. 

 

Of course, this isn't handed out by all car insurers, but these are some of the common inclusions that you can avail as an add-on.

 

  • Gap insurance: This insurance covers the difference between the car's actual purchase value and the balance of your loan if the car is rendered unusable.
  • Rental reimbursement: This covers the cost of a rental car if your primary vehicle is damaged or rendered unusable.
  • Glass coverage: Payment for repair of your vehicle's glassware (windows and windshields) in the event of damages.
  • Pet injury coverage: Covers vet costs if your pet is injured while in a vehicular collision.
  • Theft and attempted theft coverage: This inclusion covers the cost of break-in attempts, successful or not, that have been done on your car.
  • Fire or explosion coverage: This insurance covers damage caused by intense outburst of heat or an explosion that has caused irreparable damage.
  • Natural disaster coverage: This insurance covers lightning, volcano, hail and other forms of damage caused by natural disasters done to your car.
  • Vandalism coverage: This coverage helps cover the damage caused to your car's body by vandalism.
  • Flooding and water damage coverage: This insurance covers damage caused by flood water entering your car and rendering its parts useless.
  • Stolen keys coverage coverage: This coverage helps cover the cost of replacing a stolen car key.
  • EV-specific coverage: This coverage offers cover for EV-specific car parts, like a car battery, charging cable, wall boxes, and adaptors.

 

These are some of the common inclusions an insurer can provide. 

 

In many cases, these coverage options are bundled up into a comprehensive car insurance policy"which may provide better value compared to picking and selecting multiple different coverage add-ons.

 

Be sure to ask your insurer for a list of possible add-ons to your policy and evaluate which ones you want to have in your policy.

 

 

 

 

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