Most Australian's are familiar with Compulsory or Green Slip insurance, it's the basic insurance that we all have to carry on our vehicles. It's very general and basically covers individual injuries of those involved in an accident with you as the driver. However, many Australian's find them selves wanting other insurance; it's rather a risk to not have insurance in today's crowded driving society. Therefore, you may find yourself asking the burning question, "Which type of insurance coverage do I want, or more specifically, do I need?"
The basis for optional insurance is "transfer of risk". Because of this most insurance providers will calculate the driver's potential risk to their company. In other words, your premiums will be higher if the insurance company feels you are a risky driver. Or if you meet certain liability factors such as being young, being male, lacking experience on the road, or those unfortunate people who have filed claims in the past. Your Insurance Company will also take into consideration the make, year, and model of the vehicle and its replacement cost. Regardless of the level of insurance you choose, all are based upon these risk figuring criteria.
There are basically three various types of optional car insurance coverage. They are Comprehensive, Third Party Property Damage including both fire and theft, and Third Party Property Damage only.
Comprehensive Car Insurance
Comprehensive Car Insurance is the most expensive of the three because it does offer drivers the most protection against property damage both to their own vehicle and those also involved in a collision. It is important to know exactly what type of comprehensive coverage that you have. Some comprehensive policies will cover the driver of your car, whether they are in your household or not, but other policies do not. Please be aware that comprehensive coverage will not include mechanical, structural, or electrical failure; rust or wear and tear of the car, tires, lost wages resulting from an accident because your car is out of use, or certain types of vehicle modifications or accessories. Motorists who purchase comprehensive car insurance will also need to decide whether or not they would like to purchase insurance that will give them market value for their vehicle if in a collision or if they would prefer to purchase an agreed value of the car. Another important factor to bring up regarding comprehensive car insurance, if you have purchased a vehicle and borrowed the funds to do so, most likely your creditor will require you to purchase comprehensive car insurance.
Third Party Property Damage with Fire and Theft
Third Party Property Damage with Fire and Theft is the second most expensive car insurance one may acquire. For the most part, this type of insurance will cover only the other driver's property damage during an accident, however, your own car will be covered if stolen or in the case of fire. In many cases, claims against both fire and theft are limited; in fact, most policies only cover your vehicle's market sum insured with a maximum of $5,000. One added plus to this policy, as well as the general third party property damage policy is that the insurance provider will generally offer uninsured motorist extension. Uninsured motorist extension covers your vehicle if it incurs loss or damage from an accident caused by the driver of an uninsured vehicle. Generally there is a maximum of $4,000 paid. If you are involved in this type of accident, it is your responsibility to supply your insurance provider with the uninsured motorists address or phone number, as well as their name.
Third Party Property Damage
Third Party Property Damage only is the least expensive of the three options. It covers you for the damage you may cause to another car and usually includes limited coverage for damage caused by uninsured motorists, as mentioned above. If you are involved in an accident and it is your fault, this policy will cover the loss or damage of property up to $20 million dollars.
There are many other ways to save money when buying insurance regardless of the type of coverage you choose. For one, you may want to consider choosing a policy with higher excesses; this will reduce your premium. An excess is the amount of money that you agree to pay if involved in an accident prior to the insurance kicking in. For example, if your excess is $500; you will have to pay the first $500 of any costs acquired from a claim, and then your insurance provider will pay the remainder of the claim, or up to the amount that you and the provider have agreed upon. Another way to save money on car insurance is to remain claim free. Usually individuals that have six no-claim years can experience a discount of 70% and that you have kept the same provider and policy during this timeframe. Other factors, such as your age or restricting the use of your car to those over the age of twenty-five may also decrease your premiums. No matter which type of insurance you choose, it's important to get at least three individual quotes. Look for insurance companies that offer you good coverage and reasonable prices, and always read the small print.