Where Car Insurance Provides No Protection
There’s no escape from car insurance in Australia. As a bare minimum, compulsory third party insurance (CTP or green slip insurance) is required, and heavy penalties are levied for driving without it.
CTP is automatically acquired when a vehicle is registered. It covers all personal injuries, but, alas, in some states doesn’t normally cover the vehicle or other possessions of yourself or other parties.
No compensation is given to people who contribute to their injuries, for instance by not wearing a seat belt, or to drivers who are entirely at fault.
The Other Kinds of Insurance
Your car may be an old banger worth only $500, but you might just ding a luxury car and incur a repair bill of thousands of dollars. For this, you’d need third party insurance, which also covers damage to the car or property of other people, but not yours. Third party fire or theft insurance covers losses sustained through these factors, in return for a marginally higher premium.
A comprehensive policy, the most common form, also covers your car, and can be mandatory if a car is purchased using a loan. Insurance can be obtained to cater to the needs of enthusiasts, and includes such features as coverage for multiple vehicles. Standard policies assume that cars depreciate in value over time, but this is not true of your pristine 1967 Jaguar XKE. Such policies could be cheaper, because collectible cars are pampered and driven infrequently and so very carefully.
What Isn’t Covered
If it was a Nissan Dualis review that spurred you to action, you’re likely to have to service those wobbling brake discs at 24,000km. Policies, however, don’t generally cover for losses sustained through mechanical, structural or electrical failure and depreciation or income lost from not having access to a car, and this is a case of mechanical failure. Insurance specifically for mechanical failure is available, which in effect becomes an extended warranty.
Policies usually provide no protection from losses sustained because the car was unsafe or taking part in a competition, damage was intentional, or the driver had no active licence, had taken drugs or was over the legal limit for alcohol, or was not authorised to drive the vehicle.
Let’s Not Forget Christmas
After shopping for Christmas, people often leave hundreds of dollars of goodies in their car, which thieves will find enticing. Car insurance may not cover the cost of stolen items. CTP and third party policies provide no coverage, and even in the case of a comprehensive policy, every policy differs. You should closely scrutinise your policy if you’ll be leaving a car boot-full of gifts unsupervised for any length of time. Coverage may only be given if goods were out of sight. Store cards can give coverage for purchases made at that store. Coverage may be gained from home insurance, although this may require an option for personal possessions.
When arranging car insurance, it’s imperative to be completely honest, as coverage may not be given if incorrect details have been supplied. Otherwise, the worst outcome will result if you read a Mitsubishi Lancer review and decided you absolutely had to own such a vehicle. Then, you can look forward to taking out the most expensive car insurance policy around due to the high speed and small size of this vehicle.