buying your dream car and driving out of the showroom is definitely a matter of great joy and happiness. However, in all probability, you would have simply signed on the dotted line and got the car insurance done without even bothering to go through the fine print, the inclusions and the exclusions. What you should have done is read the various policies on offer, mix and match the clauses and ultimately structure a cover that would meet and optimise your requirements.
In Australia, there are basically four types of motor insurance.
Compulsory Third Party Insurance (CTP) – Getting this cover is compulsory in all States and Territories. It provides compensation to victims of accidents for any bodily injuries that might have been caused by a vehicle. However, it does not provide any cover for damage to the vehicle. Hence vehicle owners should look for other types of insurance that covers this possibility. It also does not take into account theft of the vehicle and the owner receives no recompense if this happens.
Comprehensive Insurance – As the name suggests, this is one policy that has no exclusions but only inclusions. It covers weather damage, collision, malicious damage, damage to vehicles, and theft of vehicles. If you pay a little extra on your premium, you’ll also get cover for damage caused to other vehicles. You can opt for quantum of sub-limits based on what areas you want covered the most.
Fire and Theft only – After CTP, you can choose this cover as add on without going into comprehensive vehicle insurance. Many vehicle owners live in places where theft and burglary are rampant. This policy will be very useful for them.
Third Party Property only – This cover provides insurance compensation to vehicles damaged by the policy holder’s vehicle only and nothing to the owner of the vehicle. This policy is generally preferred by those having very old cars or low value cars. It helps them to protect themselves from being sued by other car owners. This is again a good option to be added to the standard CTP.
These are the main types of car insurance covers available in Australia. Vehicle owners can customise a cover of their own preference and choosing.