No matter how skillful a motorist is, they are always at risk on the road from reckless drivers. Since the advent of cars, accidents have claimed lives and caused other forms of devastation for those who drive vehicles.
That’s why it’s so important for drivers to have insurance coverage to help protect them financially in the event of an accident.
If you’re looking to purchase insurance, here are the different types of car insurance drivers should have while driving a vehicle.
1 Compulsory civil liability insurance
The minimum car insurance cover for drivers in Australia is Compulsory Third Party Liability Insurance (CTP). This is compulsory car insurance to help people who suffer injuries as a result of accidents or to financially support the families of the deceased.
If you are injured, or you, as the driver, have hit a pedestrian or another motorist, the person at fault must benefit from the CTP to cover medical expenses.
CTP insurance is also called Green Slip. In most Australian states, CTP insurance is included with registration. In New South Wales, drivers must purchase cover before registering.
Some people confuse CTP with full coverage. But unlike the latter, CTP coverage only applies to someone else’s car or property, not yours. For some insurers, CTP only applies to people and not to vehicles owned by anyone. Insurance of Youi and other similar providers have varying coverage, so ask about the details.
2 Full car insurance
Full coverage is an absolute must for all riders of all skill levels. It offers the best coverage and helps drivers reduce personal expenses once their vehicle has been damaged in an accident. It provides excellent coverage in the event of theft or damage to the car and other people’s property.
Note that comprehensive coverage will have the highest premium because it offers the highest insurance payout if you compare it to other policies. It includes more benefits such as accidental damage, storm damage, car replacement and different types of coverages.
Your insurer will also ask you if you want additional benefits that you can afford. You may be able to rent a car while your damaged vehicle is being repaired. They may also offer you the option of insuring the agreed or market value of your vehicle. These offers will depend on the insurer.
Full coverage also comes with exclusions. This will not apply to any other drivers unless you name them in the policy. They must meet the criteria of the insurer. If the driver of the vehicle has caused damage due to driving under the influence, the policy will not cover the damage. Always check the policy to see what your insurance covers.
3 Third party fire and theft insurance
Think twice if you think your car will ever be safe. A business owner turned thief has been charged with more than 35 heavy equipment and vehicle theft offences. It proves that you can never be too sure. But having the right coverage can help you if your car is stolen.
To cover the cost of loss or fire, drivers can purchase third-party fire and theft insurance that can help them pay for necessary repairs to their vehicle or other people’s vehicles. This can save you thousands of dollars in covering the other party’s expensive vehicle. It also assumes the costs if an unregistered vehicle causes damage to your car or causes an accident.
Insurers offer different coverage plans, but you can reduce the cost of the insurance premium by doing the following:
- If you plan to name other drivers in your policy, only name close people over the age of 25 to minimize the premium cost.
- Ask your insurer about discounts. Some companies will offer them if you choose to purchase your auto insurance from the same provider as your home insurance. Insurers also offer discounts for purchases on their online portal.
- If you pay a higher deductible, it could cost more to claim. But it can still be worth it due to lower premium payments.
4 Material damage from third parties
This insurance coverage is similar to third party fire and theft, but covers other types of damage not caused by fire or when vehicles are stolen. It facilitates expenses when the other party’s car is damaged through your fault.
Third party property damage is the most affordable car insurance for drivers. Whether you caused damage to a used vehicle or a new car, the warranty applies to any vehicle, regardless of its condition.
Coverage will cover the following costs:
- Damage to the other person’s car
- Damage to third party property such as a house
- Damage inflicted by an uninsured driver on your vehicle
- Expenses and costs of legal proceedings
Every driver in Australia must have a minimum amount of insurance cover to be able to register their vehicle, but there are additional levels of cover which can offer car owners greater peace of mind.
Auto insurance coverage can protect both the victim and the responsible party. The insurance cover takes care of the financial aspects of the accident and the damage caused by natural disasters. Be sure to find out what coverage inclusions your provider is willing to pay for.