Why do I need car insurance?
For most Australians, our car is one of the most valuable assets we have, so we want to make sure it’s protected. Whether your vehicle is your pride and joy or just used to get you from A to B, it is important to understand insurance and have the right cover for you and your circumstances.
Firstly, what is Compulsory Third Party (CTP) Insurance?
As demonstrated by the name, Compulsory Third Party Insurance, also referred to as CTP Insurance is compulsory. It is not possible to have a vehicle registered in an Australian state or territory without Compulsory Third Party Insurance cover. In Queensland you can simply nominate which Compulsory Third Party Insurer you wish to choose upon registering your vehicle with the Department of Transport and Main Roads and the premium is paid as part of your registration fees. In New South Wales however, you are required to have organised CTP Insurance directly with an insurer prior to making an application for vehicle registration with a Transport for NSW service centre. Make sure you contact your state’s relevant transport centre to find out their regulations for Compulsory Third Party (CTP) Insurance.
So why do I need Compulsory Third Party (CTP) Insurance?
Compulsory Third Party (CTP) Insurance is essentially a personal injury insurance. In the event of an accident, if any personal injury is caused to any other person, the driver or vehicle owner can be held legally liable. Compulsory Third Party (CTP) Insurance insures the driver or vehicle owner for any death or injuries sustained by others as a result of the accident.
How is Compulsory Third Party (CTP) Insurance different from Comprehensive Insurance?
Comprehensive insurance differs from Compulsory Third Party (CTP) Insurance in that it covers damage to vehicles and property. For example, comprehensive insurance can cover damage to your vehicle, total loss of your vehicle, theft and damage to your vehicle. It also covers any damage you may cause as a result of an accident to other people’s vehicles and property.
So Compulsory Third Party (CTP) Insurance covers injury sustained by people as a result of an accident, whereas Comprehensive Insurance covers damage to vehicles and property.
Which type of car insurance is right for me?
So we know that it is essential as a condition of registration of a motor vehicle in Australia to have Compulsory Third Party (CTP) Insurance which covers personal injury to third parties, but what insurance options are available for loss or damage to vehicles?
Option 1. Comprehensive Insurance
As discussed earlier, comprehensive insurance covers your vehicle for accidental damage, legal liability, fire and theft. It can also cover total loss or the cost of repairing damage to other people’s vehicle or property caused by an accident.
Option 2. Third Party Insurance
Third party insurance provides cover for accidental damage to other vehicles or property caused by accidental damage. Unlike comprehensive insurance, it does not cover your own vehicle for damage or total loss.
Option 3. Third Party, Fire and Theft
Most insurance companies also offer a Third Party, Fire and Theft insurance option. This option provides the same cover as Third Party Insurance above, but also includes cover for fire and theft for your own vehicle as well.
So how do I organise insurance for my car?
Accidents are not something you expect to happen, in fact quite the opposite. So the peace of mind that you get from having vehicle insurance is invaluable. However, it can be a challenge to compare all insurance types, providers and products to find the best solution for you and your vehicle and not all insurance products are created equal.
Here at Approved Car Loans, we can arrange a variety of carefully selected insurance options from Australia's leading insurers tailored to suit your needs. We can also arrange tailored finance solutions with comprehensive insurance included, so all you have to worry about is finding your dream car.
For more information on finance options or vehicle insurance, please give our friendly staff a call on 07 3340 6700 for an obligation-free quote or use our online repayments calculator to tailor your repayments.
Alternatively, you can apply online for finance in just 4 quick and easy steps.
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We have built strong relationships with Australia's leading lenders and compare them on your behalf to get the best possible finance approval for you.