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Types of car insurance – what car insurance suits you?
There are different types of car insurance to consider. Compulsory Third Party (CTP) car insurance, Third Party (property) car insurance, Third Party (fire and theft) insurance, and Comprehensive car insurance are the main ones.
Types of car insurance
Compulsory Third Party (CTP) car insurance covers injury and death to another person if you are involved in a car accident. This type of insurance forms part of your car registration and all drivers are required by law to have it. Service SA and also MAC has more information about it. It does not cover your own car. You need to select one of the following types of car insurance for that.
Third Party (property) car insurance covers damage to another person’s property and your own legal costs if you are involved in a car accident.
Third Party (fire and theft) car insurance covers damage to another person’s property, but only offers limited cover for damage to your own car from theft or fire.
Comprehensive car insurance covers the lot and is the best but most expensive. It covers damage to your own car and another person’s property.
If you own a Holden Commodore or Ford Falcon and the model appears on a list of most stolen cars then get Comprehensive car insurance if the value is over say $1500. This will cover theft and usually any damage the thief causes in your car, plus at least the market value of your own car if it ends up damaged or being written off.
If you own a worthless rust bucket and you bang into a luxury sports car then I would definitely go for at least Third Party (property). That way the sports car is covered but your car is not. This is the type of inexpensive insurance that most people chose if they can afford to replace their own car if it is written off.
If you own a car of modest to expensive value then it goes without saying that you should pay up for Comprehensive insurance. It might seem expensive but it is worth it. Many situations are covered by it.
Remember that CTP is not enough on its own to cover the cost of repairing another person’s car or other property that your car causes damage to. You must have at least Third Party (property) insurance if you are not rich and do not want to get into debt paying someone for the repairs for their property.
Who do I chose?
This will not be very helpful in saying this but there are so many insurance companies out there that I am not even going to begin to recommend any. Supermarkets are even in on the game and they have some interesting ways of looking at your risk level (e.g. if you eat pasta and are overweight). I will leave it to you to Google the usual insurers and/or comparison web sites. Be careful with the latter sites because they promote what they receive a commission for, leaving out everyone else.
Basically look for the follow main features if you choose comprehensive car insurance. Some of these apply to other types of car insurance as well.
Decide whether you wish to have an “agreed value” or a “market value”. The latter is sometimes the lower value of the two.
Then decide if you wish to pay a lower premium by having a higher excess or instead a higher premium with a lower excess. Sometimes there is more than one excess in the policy to consider before you buy. Remember that your driving record is considered. The names of all drivers of the car may need to be supplied if there is an exclusion in the policy that does not cover unnamed drivers. Their age and driving record may be required also.
Look at what modifications have been made to the car and what security features it has. Modifications push the premium up whereas security features beyond the standard ones can lower the premium. Always inform your insurer if you add modifications because these may not all be covered in the policy.
Consider what current companies you use for home and contents insurance, mortgage insurance and other types of insurance. Do they also offer car insurance? Would it be cheaper if you bundle the lot?
Watch out for sneaky little exclusions or clauses. If an ambulance hits you, with or without their lights flashing, guess who gets the blame? You do just for being in the wrong place at the wrong time. This is usually the case with many insurance clauses even though it was not your fault that the ambulance hit you because you could not get away fast enough. Weather events, natural disasters and lunatics on the loose behaving wildly are among other exclusions to look out for in car insurance offerings.
Does the insurer consider dashcam footage? This is something more recent to think about when researching car insurance.
Try and get at least one free windscreen replacement per year included the insurance cover. There are so many mental thugs out there that it is worth having at least one replacement windscreen for free each year if you need it.
See if the insurer allows you to get quotes and chose your own repairer instead of their repairer. There is a long history of car insurance repair scams by insurers in this country and it can be a headache.
In summary, read and compare what is on offer, what exclusions there are and what the premium and excess is for the policy for each of your shortlist of car insurance companies. Chose the best one, not so much the cheapest one. Then review any changes they try to make in the following months. You can change your car insurer if you are not happy.
NB: This is not a paid or free endorsement but an example. For specialist car insurance for classic cars and others find companies like Shannons and see what they offer.
Related site post: What does comprehensive car insurance cover?
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