Shopping for motor vehicle insurance in Australia can be extremely time- consuming and tedious. That’s why we’ve prepared this guide with all of the information and handy tips you need to get started today. Let’s focus first on the different coverage options available.
Most auto insurance policies in Australia are recommended, but entirely optional. CTP insurance, however, is mandatory for all citizens of any state in Australia. While it doesn’t actually provide any coverage for the vehicle, it does cover any harm to a person that was the result of a vehicular accident. It’s usually the first insurance policy anyone considers because it’s compulsory. It’s still a good idea to keep other, more comprehensive, policies in mind once you begin shopping for insurance.
CTP stands for Compulsory Third Party insurance. Most people simply refer to it as ‘greenslip’ insurance. Some states will include CTP insurance policies in the vehicle registration fees. Other areas will let their clients choose their own provider. This allows them to bundle their greenslip insurance with other coverage packages to get a better price all round.
If you live in ACT, then your CTP coverage is included in your registration fee. This frees you up from having to search for a CTP coverage plan. From there, it’s time to move on to optional automobile coverage plans that will protect your vehicle and belongings in case of an accident.
If you’re actively searching for car insurance, then one policy you’ll hear quite often is comprehensive insurance. It can get pretty confusing if you aren’t sure what that means. The term refers to the highest level of insurance coverage an individual can have. That doesn’t mean it’s always all-inclusive. The specifics of what is actually included may change from one provider to the next.
In general, a comprehensive plan covers third party claims as the result of an accident, damage that may have been caused to your vehicle, acts of nature that could damage the vehicle and damage or loss as the result of theft. Comprehensive plans always cover these basic areas. It is also the most expensive of the insurance plans available in Australia.
A comprehensive plan is definitely the best option if you can afford it. However, some people may be more restricted because of their budget. If that’s the case, then exactly how much coverage is needed should be considered before deciding whether a comprehensive plan is worth the investment.
You might be wondering exactly what is covered with a comprehensive insurance plan. Below are a few examples of accidents insured with this type of plan. All forms of collision and accident damage are covered. Scratches, dents and bumper damage may also be included. The theft of the vehicle is covered as well as damage that comes from vandalism, falling objects, or animals.
In some situations there must be certain conditions met before the insurance provider will honour the claim. For example, if the driver was drunk when the accident occurred they won’t likely be covered. The same goes for driving recklessly or without a licence.
A few things that aren’t covered are other drivers, car rentals and lockout services. These are fairly minor issues that can be handled out of pocket in most cases.
Fire and Theft Motor Vehicle Insurance
Fire and theft insurance is the most basic and affordable of plans. It really shines when partnered with Combined Additional Coverage insurance. When combined in this way it is often referred to as minimal comprehensive insurance, which is basically what it is.
While it may be considered limited, it still covers your vehicle in a variety of different scenarios. It will pay for damage caused by fire or theft. It also covers damage caused by other environmental disasters such as lightning, floods, or earthquakes.
The theft part also branches out to include damage from vandalism or other malicious causes. Some plans also include collisions with animals, but that’s not something you can expect as standard. Read the fine print and speak with the insurance provider regarding exactly what they include in their fire and theft coverage.
If your budget is tight but you want to be covered in certain situations, then this is a great option for you. It doesn’t offer any form of collision coverage, but this can usually be added to the package for an additional fee.
You will need to agree on a certain deductible with the insurance provider. This is the money you’ll pay out of pocket for the claim when a new policy is created. A higher deductible usually means you’ll pay less on a monthly basis. Weigh your options out and choose a number carefully.
Most people want to be insured if they are in an accident. Those people always look for some form of collision insurance to add to their vehicle. You can often add this to other forms of insurance. Some people choose only to have collision insurance as they believe it’s the most important. That decision is entirely up to you.
Collision coverage will reimburse the policy holder if their vehicle is damaged or destroyed in an accident that was the fault of the policy holder. This can include running into another vehicle or stationary object. Some policies expand further to offer more protection. You may find policies that cover your vehicle if it was hit while parked.
Collision insurance also comes with a deductible. This is a term you should become familiar with if you’re shopping for automobile insurance. It’s the fee you’ll have to pay out of your own wallet whenever you are in a collision and need to open a new policy.
Your deductible will also directly affect the monthly payments you make to your insurance provider. Higher deductibles mean lower payments and lower deductibles mean higher monthly payments. Find a balance that suits your budget. At any rate, collision insurance should always be something you consider. Even if it’s only paired with your standard CTP insurance.
A Few Things to Consider First
Shopping for automobile insurance can be confusing no matter where you live. There are some important things to remember and keep in mind once you begin shopping. First, you should consider the factors that will influence your premium before you actually contact the provider. This will help give you some example of what you can expect to pay.
The value of your vehicle will have a significant impact on the coverage premium. The use of the vehicle will also often make a difference. This is particularly important if the vehicle is used for commercial reasons. Your personal driving and insurance claims history will come into play as well. If you have a good record, then you can expect to pay a lower premium. Those of you with not so great records might end up paying a little more for some time.
Some providers will also ask where the car is stored overnight. This isn’t extremely common, but it can be a factor in determining your premium. Finally, your age will also affect the decision-making process. It may sound discriminatory, but providers have exemptions from certain parts of the law when it comes to who they provide insurance to and how much they charge.
If there have been any serious modifications or additions to the vehicle it’s your job to inform the insurance providers. You’re obligated to disclose such information as well as other relevant information when needed. You may need to provide the information again when the policy is renewed.
Here are some general tips shoppers should remember to save the most money
1. Understand the Coverage Types
This part should be easy if you’ve read the information above. You should never start shopping for insurance if you don’t fully understand the various plans and what they include. You might find yourself paying far too much for something you don’t need, such as comprehensive insurance when you really only need fire and theft insurance.
You should also keep in mind that a particular coverage type isn’t going to be the same with every insurance provider. There are no laws regulating the type of coverage offered by providers. You need to read the contract and check anything you don’t understand. If you aren’t getting everything in your policy that you think you should, then take your business to another provider.
2. Flashy Cars Might Cost You More
Some people start shopping for insurance before they’ve purchased their car. This is great because it means you can keep future expenses in mind. This means when insurance providers are determining your premium, there are various factors to consider. One of the factors that plays a big part is your vehicle itself.
More expensive vehicles tend to cost more to insure. The provider may also consider how expensive it is to repair the car and what types of accidents others have had in the same vehicle. Knowing this, choosing an affordable, reliable vehicle is your best option if you want the lowest possible premiums.
3. Find Ways To Reduce Your Premium
There are a few options you can consider to reduce your premium and save your money. The most obvious way you can reduce the premium is simply by driving safely. Most companies reduce premiums for safe drivers after a certain probation period. They often offer savings to drivers who put fewer miles per year on their vehicle. Driving safe and only when needed can save you a lot of money on your monthly bill.
You can also check with the company for any unique discounts they offer. Almost every insurance provider will offer some kind of discount, whether it’s for vehicles with alarms or those with additional air bags. Insurance providers tend to have certain features they find favourable and when you use those features they reduce your premium.
Some people choose to increase their deductible if their premium gets too high to cover. Even if you’ve already started your policy it might not be too late to make some changes. Your provider will likely work with you and be more than willing to increase your deductible if you choose to do so. Just remember it means you’ll have to pay more at the time of the accident, so consider it carefully.
4. Always Shop Around
Remember that you have a lot of options. Even in ACT alone there are dozens of reputable insurance providers who are eager to take you on as a new customer. Use this to your advantage to ensure you get the best prices. Shop around with different providers. Get multiple quotes from everyone in your area and then compare the numbers.
You may even be able to contact one provider and let them know you’ve found a better deal. They could work with you to keep you on board by making their coverage even better. This won’t always happen, but it’s worth a try.
5. The Internet Is Your Friend
The internet is the perfect tool when it comes to shopping for insurance and comparing quotes. You’ll find websites built around comparing different providers as well as the individual websites for the providers themselves. A company’s website is usually a good reflection of their business standard and work ethic.
One website that really stands out from the rest is HamiltonBrokers.com.au. They have gradually become one of the top insurance brokers in all of ACT and Australia for that matter. Not only can you go there when you need coverage, but you can go there for general advice and guidance. Their goal is to help you get the best deals possible for you.
This information may be regarded as general advice. That is, your personal objectives, needs or financial situations were not taken into account when preparing this information. Accordingly, you should consider the appropriateness of any general advice we have given you, having regard to your own objectives, financial situation and needs before acting on it.