Car Insurance Tips

Car Insurance Tips

These car insurance tips will help you understand the insurance terminology that insurance companies use.

Remember Insurance Before You Buy

Factor in the cost of car insurance before you buy a car. If you’re 23 and buy that Subaru WRX turbo before you price the insurance costs, you may be in for a supercharged shock at the price. Or you might not even be able to find an insurance company that will cover you against an accident, and remember too that if there is going to be finance involved you will require comprehensive car insurance. On the other hand a ‘near new’ Lexus sedan may be cheap, because safe, nerdy drivers drive them. Even ordinary cars can vary markedly in insurance because of different repair costs.


Shop around and Compare Prices

Premiums can vary by 300 per cent for the same driver at different insurers.

Ring up for quotes and talk it over; young drivers may find they’re eligible for a no-claim bonus if a parent paid extra for insurance to cover him / her for 3 years without an accident or losing points.

Remember even compulsory insurance (covering damage to third parties you injure) costs can also vary if insurers deem cars or drivers risky, especially in New South Wales and Queensland where it has been unbundled from other at-registration charges, as ‘green slip’ insurance. All car insurance companies offer free comprehensive car insurance quotes, so do the research first.


Get Third Party Fire & Theft Cover as a Minimum

You don’t have to insure your car, unless it is under Finance in Australia, but Third Party Property (TPP) is usually regarded as the minimum. Otherwise hitting a $100,000 Mercedes and being handed a big bill plus fixing your own damaged car could bankrupt you. TPP is the cheapest way to get insurers to carry this risk and it’s commonly used for old or exotic cars which can be expensive to insure. It covers damage to others of up to $20m – still not enough for one driver whose Land Rover’s hand brake slipped and it ran down onto the railway and caused a train crash. TPP (fire and theft) insurance is the most basic way of covering damage to your vehicle as well. It’s less common in Sydney (Australia’s car theft capital) than in other parts of the country and costs a higher premium. And some third party insurers also offer free limited cover for damage if an uninsured car runs into your vehicle (AAMI up to $4000).


Comprehensive Cover

Comprehensive car insurance, covering any damage done to your car or caused to others, is most common in Australia. Higher excesses will reduce premiums, so you might pay the first $1000 of damage. All insurance companies offer no claim bonuses (usually maintained if an accident is not your fault). Some discount premiums if customers bring home insurance or other business as well as their car. Drivers over the age of 25 can also get discounted premiums.


Be up front and check the fine print

Traps with insurance companies abound and it pays to be honest; they will knock back phony claims and cancel a policy, making it hard to find another, like the guy who took a hammer to his car in the hailstorm, hoping to get a new one. They will not pay up for damage if you let someone drive the car who was intoxicated or unlicensed or not authorised. Insuring a 17 year old’s car in dad’s name is asking for trouble when a claim is made and the insurer wants to know why the driver was not nominated on the policy. Some insurance companies will allow young drivers with their own car to drive the family vehicle occasionally, if they are told up front, and it’s not a Ferrari! Or they might add a surcharge.