Car Insurance

Most people think they’re a great driver, but do you really want to run the risk of causing tens of thousands of dollars of damage from one small mistake? It’s our belief that if you can’t afford car insurance (3^rd party at least), then you shouldn’t be running your car. It should be factored the cost of car ownership in the same way you would registration or servicing costs

As with any type of insurance, there can be big differences between what you’ll pay for your premium between companies (see comparison article here) and the types of cover you can have. Please take a few mins to read through this guide to ensure you have the right level of cover for your vehicle.

Third Party Insurance:

The bare minimum level of coverage. This ensures that if you are responsible for an accident, the most you’ll pay is your excess.

Your actions could result in a $200,000 BMW being written off, and insurance will cover that. Could you imagine if you weren’t insured and had to pay for that? Even if their insurance pays for the repairs, their insurance company will then come after you for reimbursement!

There is zero cover for your own car, any damage or loss to your vehicle will come out of your pocket. If your car is worth a significant sum of money to you, we wouldn’t recommend only getting Third Party insurance

Note you will still be liable in court for any fines from careless driving etc. There is a useful guide from the Insurance & Financial services ombudsman here

Third Party Fire & Theft:

Includes all aspects of Third Party (above), however the key difference is you will also be covered if your own car is stolen or lost due to fire (or both). If the jump from Third Party to Full Comprehensive cover is too much, this may be a suitable alternative.

Note that the excess applicable for theft may be different to the excess charged under an accident claim.

Full Comprehensive:

Recommended for most people. In addition to the above two, you are also covered for any damage or loss to your own vehicle in the event of an accident.

If you’re purchasing a vehicle on finance, you will also be expected to have this in place.

At a glance, coverage levels:

Cover	Third Party	Third Party + Fire & Theft	Full Comprehensive
At fault – Repair/replace of other persons vehicle	Yes	Yes	Yes
At fault – Repair/replace of own vehicle	No	No	Yes
Vehicle theft	No	Yes	Yes
Vehicle fire	No	Yes	Yes
Not at fault (Other driver uninsured) – Repair/Replace of own vehicle	Limited*	Limited*	Yes*

*Can vary by insurer. Limited, generally will be around $3,000-$4,000 of cover. Any extra amount will need to be collected by you from the driver responsible. If the other responsible driver is insured, their insurance will cover all damage to your vehicle

Add-Ons:

Typical insurance add-ons include:

Roadside Assistance. If you’re vehicle breaks down, has a flat battery etc then you can call to have someone help. If you have an AA membership then of course you’re doubling up on cover, but it’s worth comparing on price to see which is better value.
Windscreen & Glass cover. Good for peace of mind, as it is excess free. Depending on the vehicle windscreens are typically from $500, and specialist sometimes over $2000. Common claims are from stone chips and vandalism/break ins
Rental Car Cover. In the event of an accident, while your vehicle is being repaired you can be reimbursed for a rental car. However you may have to provide a daily contribution to the cost as well. If you can go without your car for a period of time then it’s probably not worth. In addition often vehicle repairers can provide you a loan car for free whilst your car is being repaired anyway.

Market Value:

Your car is typically valued in one of two ways. Market value means that the insurer will value your car according to current market conditions. They will pay-out the LOWER of either the market value at the time of incident, or what you have set as the insured value.

When setting the value of your car, it’s important to be realistic with this figure!

If you think your car is worth $6,000 but a valuation comes in at $3,000, you’ll be covered for $3,000. Meaning you’ve likely been overpaying for your insurance, as the premium is based on a value of $6,000!

See our guide here for further information on how insurance valuations work.

Agreed Value:

Name says it all. The value you set for your vehicle (within reason) will be what you will be paid out in the event of a write-off. Less any deductions for example the excess or remaining premium if you haven’t paid annually.

Upon renewal of the policy, this value is often changed by the insurer to account for depreciation. Ensure you check any renewal documents to ensure you’ve got the level of coverage you expect.

In the event of an accident:

Once you are safe and assuming no injuries etc, there’s a few things to be aware of:

It is expected that regardless of if you were at fault, you do not admit liability. Make sure to also get some basic information from other driver(s) involved:

Full Name
Address
License Plate
Phone Number
Insurance Company

If there are any witnesses, you also want to get their name and contact number. You should also report this to the police, even if it is a minor accident. If there is any disagreement, they can help clear it up.

Common Exclusions:

There are a number of reasons why insurance will not pay out on a claim. This isn’t an exhaustive list, and you should always check your policy. Here are some of the most common:

Alcohol/Drugs – Being under the influence, regardless of whether it was below the legal limit
No current WOF or vehicle not up to WOF/roadworthy standards
Vehicle modifications not mentioned to the insurer
Failing to remain at the scene of an accident
Off-road Driving
Breaching license conditions – For example carrying passengers on restricted or driving outside of allowed hours.
Unlicensed driver using your vehicle (except if stolen and reported to the police)
Using your vehicle for businesses purposes – E.g. Uber fares, hauling business goods. You should have a separate business insurance policy for this