Are you in the process of purchasing a new or used car? One of the first things you’ll need to do before getting behind the wheel of your new vehicle is to ensure you are insured for peace of mind. Below is a list of the most common types of cover to consider when choosing an insurance policy that’s right for you.
What type of insurance do I need?
The type of insurance you choose will largely depend on the value of your vehicle and how you want to be covered. There are four main types of car insurance in Australia as described below:
Compulsory Third-Party Insurance
CTP insurance covers injury or death to others involved in an accident and is the bare minimum / mandatory type of insurance in Australia. Your premium is included in your vehicle registration fees and you have the option to nominate your preferred insurer each year when you pay your vehicle registration fees.
Third-Party Property Insurance
This type of insurance covers damage to other people’s property and the legal costs involved but note it does NOT cover damage to your own vehicle.
Third-Party Fire & Theft
This type of insurance covers damage to other people’s property and the legal costs involved, and in addition also covers you for damage caused to your car from fire or theft. Some insurers will also include other add-ons to this type of policy such as emergency accommodation or transport.
A full comprehensive insurance cover is the most extensive policy you can get for your vehicle because it covers you for both damages to other people’s property PLUS damages to your own vehicle. Additionally, in most cases comprehensive car insurance also covers you for damage caused by fire or theft, and in some cases environmental damage by storms, hail, floods etc. Each insurer has their own inclusions and list of ‘optional extra’s / add-ons’ so it’s always best to do your research and compare insurers when choosing a policy for your vehicle.
Important to note: when you take out insurance cover for your car you are obligated under the insurance contract to keep your car roadworthy and in good condition and well maintained or you risk your insurance claim being rejected (for example if you were to let your tyres go bald and not replace them).