- Posted 14 Sep
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Have you read the fine print on your car insurance policy? Do you know what type of coverage you have if you are in an accident where you are at fault? What if your car is stolen or damaged by vandalism? Australian law requires motorists to carry compulsory third party (CTP) insurance, but there are many reasons to purchase insurance beyond this basic minimum. Here are some facts and statistics you’ll want to know when considering your insurance options:
Some surveys suggest that as many as one in ten drivers are not insured, though drivers are required by law to carry a CTP policy that covers personal injury to other parties. Around 20 per cent of drivers carry only this minimally required CTP coverage. However, meeting this basic standard does not provide much protection against financial damages.
For instance, a basic CTP policy does not cover vehicle or property damage you may be responsible for if an accident is your fault. It also does not provide medical coverage for you and your passengers or pay for property damage to your vehicle. The only people who benefit are other drivers or pedestrians involved in the accident.
Theft and fire coverage can add peace of mind, but read the fine print carefully. Some policies cap damages at just $5,000, which won’t be much help if your vehicle is heavily damaged by a fire or severely vandalized. Also keep in mind that theft insurance may not cover the loss of personal items such as cell phones and purses.
Keep your car in top shape
Most policies have a clause saying the insurer isn’t required to pay out if your car is deemed not roadworthy. So even if an accident is not your fault, if the insurer can prove your car had a maintenance issue you may still receive no money. If your tyres are bald or your brakes have problems, this could void your coverage.
Some states have required annual safety checks, but some areas, including Victoria, do not. Keeping up with regular maintenance will keep your car in roadworthy shape and protect you in case you need to make a claim.
Always read the fine print
Once you’ve chosen a policy and paid your premium, you’ll have coverage for a year before your contract is renewed. But even if you are signing again with the same insurer you should still re-read your contract every year. Coverage can change, and you don’t want to find out too late that you are no longer covered for something that you thought you were.
The best time to research your insurance options is when you are planning to purchase your next car. Car finance options and choosing their ideal vehicle are what most buyers focus on, but insurance should be an important part of the purchase process. Doing your research at this stage can save you hundreds and help you build a coverage plan that will let you feel secure and protect one of your most valuable assets.
Australian Credit and Finance wants to help with your next vehicle purchase. Contact us and let our loan experts help you get the car you choose at a great rate.