Types of car insurance
What’s that? Car insurance is your favourite ever thing to pay for? Yeah, we know it hurts the hip pocket and no one wants to really deal with it. But it’s a necessary purchase that we all need to consider long and hard about, whether we like it or not.
For those who are buying car insurance for the first time, you need to understand two types of insurances:
1. CTP - a compulsory insurance that must be purchased before considering the next step and definitely before getting behind the wheel.
2. Choice between:
- Third party property: if you’re at fault in an accident, people injured or property damaged may be covered, not including you or your own vehicle or property.
- Comprehensive insurance: a broader coverage that may cover absolutely everyone and everything affected by the accident you caused.
Please note: under no circumstance will CTP, third party property or comprehensive insurance will cover you if you’re found to be intoxicated in any way. That may include medication that cause drowsiness, illicit drugs, alcohol possibly even if you’re under the legal limit.
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How much does car insurance cost?
Wouldn’t it be great if car insurance was one, no-fuss price? Uniformity in Australia is kinda rare when it comes to financial products and car insurance isn’t any different. So when it comes to CTP, comprehensive and third party property insurance, the price you pay to protect your vehicle will likely depend on:
- which state you live in
- which insurer you choose
- the value of your car.
Is Greenslip and CTP the same thing?
Yes it is. And depending which state you live in, when you register your car your CTP cost may be included in the overall price of your car registration. As the CTP is a compulsory insurance, you absolutely cannot drive unless you purchase it first. Sure there’s no way around it, but you do have a choice on which insurer you go with. And the prices vary like you wouldn’t believe.
After I pay my greenslip, what happens next?
As mentioned earlier, you have the choice between purchasing comprehensive and third party property insurance. Imagine if you’re at fault in an accident and didn't have any insurance other than CTP. You’d have to pay for any damage done to cars, people or property. That could amount to tens of thousands of dollars!
Insurance covers you for that so that it doesn’t come out of your pocket, expert of course for you excess. And the excess is essentially an ‘access payment’ to the insurance amount that covers you in case you’re at fault. That is of course you’ve followed all the rules that bind you to your policy so you qualify to receive help from your insurer. It’s no open palm or picnic, just saying. So if you’re not sure what the rules are, read the fine print to double check.
Third Party VS Comprehensive. Bring it on.
The maximum cover you can purchase. This will cover you the most from your own injuries, car and property damage, to other people’s injuries, cara and property damage.
A premium option you would hope to have especially if you’re the at fault driver.
|Insurance type (after CTP purchase)|| Pros ||Cons|
|Third Party Property||It’s certainly cheaper, great for tight budgets and even better if you really don’t care about the value of your current vehicle. |
Covers you if you damage other people’s vehicles and property.
|Will not cover you for your own car or property if you are at fault. |
Even if your car isn’t worth the petrol you fill it with, if you at least insure it for an agreed amount you may still qualify to have it replaced or receive a payment to out toward a newer, better car.
|Comprehensive||The maximum cover you can purchase. This will cover you the most from your own injuries, car and property damage, to other people’s injuries, cara and property damage. |
A premium option you would hope to have especially if you’re the at fault driver.
|More expensive than third party property but you get more bang for your buck. Excuse the pun.|
Need a helping hand? Try Mozo’s car insurance comparison tool to put your best foot forward.
Car insurance tip 101:
1. Mozo vouches for comprehensive car insurance above the third party property, even though it’s more expensive. Why? because it will give you the most cover, and if you’re at fault, you’re going to need as much help as possible.
2. If it’s a cost issue, then opt for the 6 month payment option so that you can better afford comprehensive. Better to have the most cover you can get than miss out. After all then future is unpredictable and accidents do happen. Even the most experience and careful drivers are at fault sometimes.
The hidden extras of car insurance
Well, depending on which insurer you choose, the extra features may not be so hidden after all. If if you don’t opt for them and you thought you were covered for some of the extras, you could face a very nasty surprise. Here are some of the extra features you need to consider:
- fire damage
- hail damage
- flood damage
- roadside assist
- general wear and tear
- car hire during repair
- restricted drivers lifted
- adjusting your excess.
For just a few dollars more per week or month, you could have more than your basic property damage and personal injury claims. so don’t think any of the above is part of the package, because in most cases they’re not!
Read up on the proposed policy before signing up so that you have a clear idea on what you’re paying for, and then you can decide whether any of the above is sometime you want to add to your policy.
Want to get the full picture? Read Mozo customer reviews on various car insurance brand sna products for an honest reflection on what to expect.
Young drivers. How are they included?
Easily. It’s all about having an honest and upfront conversation with your insurer before signing up so that you and they know where you both stand. Don’t forget, they've got a business to run and won’t take your personal financial situation into account. It’s a completely unbiased business transaction when purchasing car insurance not matter who it’s for.
So if you need to add an inexperienced driver or a driver under the age 25 you may need to pay more for your premium.
How can I save money on my car insurance?
Save money on car insurance? Sounds like a fantasy! But it is possible. Here are some tips on saving money on the premium you pay:
1. Garage: Got a garage filled with stuff? Empty it and use it! You’ll save hundreds on your premium in the long run, especially if you live in a high crime area.
2. Loyalty: Repeat customer? Then reap the rewards! Watch the dollars shave off premium the longer you stay with one insurer. Our modern life is expensive enough, so if you’re a member with one insurer for a couple of years, you may want to consider establishing a longer relationship with them. You could save up to 20% of your bill if you play your cards right. Pretty awesome strategy on saving money, according to Mozo of course!
3. Good driving record: It’s nice to know that good drivers are rewarded. It you’ve had no accidents in the past couple of years then expect to pay less for your premium. Who wants to pay more than they have to?
4. Increase your excess: If your monthly budget is really stretched, opt to pay a higher excess as this will reduce the amount you pay every month.
5. Bundle up: If you typically purchase life insurance, income protection, travel and or house and content on top of your car insurance, maybe it’s time you bundle them up under one umbrella? Grouping your various policies under one insurer will help you save big bucks.
6. Multi-car policy: more than one vehicle registered in your household? From your partner to your kids, if they own their own vehicles, talk to them about con-insuring under one policy name to save on your premium cost.
7. Online purchase: By purchasing your policy online, you could save up to 20% on your annual premium. That's’ a massive saving and Mozo’s favourite way of buying car insurance.
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