Choosing the right insurance policy and the right insurer may be tough, especially today when so many options are available. For one, not many people know that Compulsory Third Party (CTP) insurance is required if you own and operate a motor vehicle in Australia.
If you choose a cheaper option that does not give appropriate coverage, you may end up paying more in the event of an accident. Thus, it is critical to understand the various types of auto insurance and their coverage.
There are four kinds of car insurance: Compulsory Third Party, Third-Party property, Third-Party Fire and Theft, and Comprehensive. Let's look at each one separately.
Read on to discover what to know about Australia’s car insurance scheme.
Third-party insurance covers injuries and property damage caused to others in the event of an accident. Third-party coverage can vary.
- Compulsory Third Party (CTP)
CTP insurance is required in all Australian states and territories; driving without it is prohibited. CTP protects anyone wounded in an automobile accident. It does not cover damage to your vehicle, other vehicles, or property, nor does it cover injuries to the driver and passengers. This sort of insurance is the least expensive, but it carries the biggest risk.
- Third-Party Property
This insurance protects you against property and vehicle damage caused by an accident. If your vehicle collides with an uninsured vehicle, various insurance companies may cover some of the damages.
- Third-Party Fire and Theft
In addition to fire and theft, this insurance covers third-party property damage.
Comprehensive insurance covers your car, other cars (if caused by your car), property, and any injuries sustained in an accident. This means that theft, fire, arson, and weather are also covered.
However, even the most comprehensive insurance policy may have exclusions. Consult the policy paper to avoid last-minute shocks.
Despite its high cost, comprehensive insurance is the best option for a new or well-maintained vehicle. Note that it is good to compare policies from different companies for comprehensive auto insurance.
Auto insurance premiums are calculated based on policy type, driving record, insurance history, vehicle type, intended use, and parking location.
The driver's age and experience are also important considerations. Young and inexperienced drivers are more likely to be involved in an accident and face higher insurance prices. Insurance companies consider drivers under the age of 25 to be a higher risk.
You can cover numerous automobiles under a single policy if you own or live in a multicar household. Two to five cars can usually fit. A multi-vehicle coverage reduces paperwork and simplifies payments. Other drivers' ages and driving records, on the other hand, may have an impact on the premium.
Most rental agreements simply include third-party liability insurance. Your rental agreement may include an insurance excess, which is the maximum amount you must pay if your rental car is destroyed or stolen.
Mishaps, theft, and other types of damage can be costly. Some comprehensive auto insurance packages include rental car coverage, but only if you rent vehicles frequently. Purchase supplementary coverage when renting a vehicle.
Whether you are a new or a seasoned driver, you must keep yourself updated with car insurance policies. Remember, rules may be different here in Australia. For these reasons, keep all this information in mind in case you need it, or a friend needs it. After all, responsible driving is key!
Are you looking for a car insurance broker? Ensura is here to help you through the process by giving you quality options. Give us a call today to learn more!
Disclaimer: As with any insurance, coverage will be subject to the terms, conditions, and exclusions contained in the policy document. The information contained on this webpage is general only and should not be relied upon as advice. The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific insurance product. It is only intended to provide education about the financial and insurance industry. The views reflected in the commentary are subject to change at any time without notice.
