There are 4 types of general insurance that relate to owning and operating a private motor vehicle in Australia:
- Compulsory Third Party Insurance
- Comprehensive Insurance
- Fire & Theft Only
- Third Party Property Only
Compulsory Third Party
This cover protects individuals who you may injure whilst driving a vehicle. It is mandatory and is regulated by each State and Territory. It is unlawful to drive a vehicle that does not have this insurance. Visit your State’s vehicle registration authority to learn more about how to acquire this type of cover.
This can cover repair or replacement of your vehicle for events including theft, collision, malicious damage and weather related damage. It can also cover repair and replacement of other vehicles that are damaged by your vehicle. Comprehensive insurance is usually chosen to cover vehicles that are in good condition. Insurers may choose to not provide cover to vehicles that are in a poor state of repair or have issues such as rust.
Fire & Theft Only
This is a limited type of cover that may repair or replace your vehicle in the case that it is stolen or damaged by fire. This type of cover will typically not assist if you are involved in an accident.
Third Party Property Only
This can provide cover for damage caused by your vehicle to other vehicles or property, but does not provide cover for your vehicle. This type of cover is typically taken out by someone with a relatively low value vehicle, primarily to protect them from having to pay for the damage their car might do to a more valuable vehicle or other property belonging to a third party.
When considering the purchase of Motor Vehicle Insurance, you may want to ask your insurer these questions:
- Is my car insured for Market Value or for an Agreed Value?
- Market Value is where the insurer determines the value of the vehicle, usually taking into account the condition of the vehicle at the time, its age and other factors.
- Agreed Value is where the insurer and the owner agree on the value of the vehicle at the time of taking out the policy.
- If the accident is my fault will my no claim bonus be affected?
- Will I have to pay my excess if I can nominate the other driver responsible for the loss or damage?
- What can I do to reduce my insurance premium?
- Are you permitted select your own repairer or does the insurer determine the preferred repairer, and are repairs guaranteed? Which option suits me best?
Other things to consider before taking out Motor Vehicle Insurance:
- Your insurer needs to be told about modifications or accessories added to the vehicle.
- You need to disclose particulars of every matter that is relevant to the decision of the insurer to offer you cover and as may be requested by the insurer, such as past traffic offences, fines, loss of license and criminal history. The insurer has a right to know and will typically factor this in to the risk you present under an insurance policy. In the event of a claim you may not be covered if you do not disclose this information.
- You have the same duty of disclosure each time the policy is renewed. If your circumstances or the details of the vehicle have changed since the last renewal you must inform
- In some cases it will be necessary to name and provide details (age etc) for all of the drivers of the vehicle, claims may not be paid for other drivers who are unlisted.
- Don’t purchase by price alone – Look for a product that is most suitable for your circumstances and needs.
- Check what you are buy – Read the Policy Document and Product Disclosure Statement carefully.
We can provide you expert advice
The right advice about the types and level of cover you need can be the difference between your business surviving an event or closing its doors. Terracalls Insurance Advisers can help ensure your cover is appropriate for your size, activities and risks.