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| choosing car insurance |
Did you know that Australians own 18 million vehicles? It makes sense when you think about the size of our country (imagine you're walking everywhere!). But while driving can make our daily lives easier, unexpected things can happen when we least expect it, so getting the right car insurance goes hand in hand with being on the road.
Since no one has a crystal ball when riding in their car, it is important to protect yourself from any accidents or injuries to others while driving. Even if you think you're a supercar driver - and let's be honest, most of us do - sometimes accidents are completely out of your control.
Car insurance is one way you can protect yourself from the unexpected. But before you sign on the dotted line, here's what you should know about your car insurance.
fix the terms
Click on the books and discover all the most common terms associated with car insurance. Here are some of the most important ones: Accident: An unexpected or unexpected event.
Agreed Value: The amount that is covered for your car over the life of the policy - this is the amount agreed between you and the insurance company. However, some providers do not offer this as an option.
Claim: Any claim you make to your insurance company after an accident, as long as it's covered under your policy.
Comprehensive coverage: coverage for the cost of damages - whether to you or you caused - after an accident. You may still have to pay a surplus, but at least your repairs will be covered whether you're at fault or someone else is.
CTP: Compulsory Third Party Insurance (CTP) is the minimum coverage that every driver in Australia needs. It is illegal not to have it. Covers you if someone is injured during an accident for which you are responsible.
Excess: When you file a claim and you are at fault, you usually have to pay an agreed excess before your claim can be processed.
Premium: Your ongoing payment (either bi-monthly, monthly or annually) to maintain your car insurance policy.
Risk: The probability that you will make a claim that the insurance company will have to pay. This may differ between a number of providers.
Write-off: When the cost of repairing your vehicle is considered too expensive to be worth the repair. If you have comprehensive coverage they can pay you a set amount or get a similar car.
Read your PDS
We understand that it may seem like a chore, but reading the Product Disclosure Statement (PDS) is actually a good thing. This will help you understand exactly what you want, as well as what is and isn't eaten.
Under Australian law, your insurance company must include all policy terms and conditions in the PDS or policy document included in the PDS. It should also be written in plain English - so you don't need expert help to understand the nitty-gritty.
Remember, however, that PDS is not tailored to your specific needs or financial situation. For this reason, it is recommended to read many PDS from many auto insurance companies. This way you can make the most informed decision for your circumstances.
If you are confused by anything in PDS, just call your insurance company and ask for more information. They should be happy to explain everything in more detail, so you can be confident that you are choosing the right policy for you.
Find out how often you drive
These days, drivers are lucky enough to have a wealth of car insurance options under their feet. One alternative policy that is on the rise is Pay As You Drive (PAYD) insurance.
PAYD is defined by the Australian Securities and Investments Commission as follows: “The premium depends on how many kilometers you expect to drive in the next year. If, during the year, you think that you will drive further than planned, you can “increase” your kilometers for an additional cost. However, if you exceed your chosen mileage and do not tell the insurance company, your coverage may be reduced.”
So, if you have a fair idea of how many kilometers you're likely to drive next year, you could end up with a lower premium than other insurance levels.
Decide on comprehensive or third party coverage
Aside from PAYD, you'll find that most auto insurance companies offer three different levels of coverage. But obviously the more coverage you want, the bigger premiums you'll pay. Here's how to stack it up: Comprehensive: The Gold Standard for Car Insurance! It will cover the cost of damage to your vehicle and any other people involved in an accident, as well as fire and theft coverage.
Third Party Property, Fire and Theft: Covers any damage to other people's vehicles if you are responsible for the accident, but does not cover damage to your own vehicle. However, you will be covered if your vehicle is stolen, damaged by fire, or otherwise maliciously damaged.
Third Party Property Damage: This is a step above mandatory CTP insurance, and covers the cost of repairing property damage you cause. It's usually the least expensive option, but remember that damage to your car will not be covered if you're at fault.
Harness the power of price comparison
We hate to break it to you, but there is no one-size-fits-all approach to getting auto insurance. In fact, we think you should shop around to find the product that best suits your current lifestyle and driving needs.
Not all auto insurance products are created equal, and while most providers will offer comprehensive third-party property, third-party property, fire and theft insurance, onlyThey do not have the same implications across the board.
This is why it's important to get a variety of quotes from different providers - and of course, read the PDS!
Comparison sites like Choosi can break complex policies into easy-to-understand information, covering everything from premiums to whether they'll let you choose an agreed-upon value, and even the availability of roadside assistance. Be aware that comparison sites generally do not compare all insurance companies in the market, but they are required to disclose the products available through them, so you should take steps to understand this.
Life without a car can be a huge inconvenience - imagine trying to manage dropping out of school, grocery shopping and coming home late from work without a set of wheels! Getting the right car insurance can help you get back on the road faster after an accident, and give you financial peace of mind knowing that part of the cost of repairs has been covered.
