Your easy guide to understanding car insurance

Whether it’s your pride and joy or just a little weekend runabout, every car on the road needs to be insured. But before you run off obtaining car insurance quotes it’s best to fully understand the different types of car insurance available to you, and compare them to find out which one suits you best. Then it’s as simple as getting some quotes to find out how much it will cost to insure your car!

So let’s start with the most basic form of car insurance:

CTP or Greenslip Cover

Compulsory Third Party (CTP) or Greenslip insurance provides cover for death and personal injury when you or the person driving your vehicle is the driver at fault in an accident. All drivers in Australia are legally required to have CTP insurance and in most states this is included in your registration fees. However if you’re from QLD or NSW you have the option of choosing your preferred CTP provider.

CTP or Greenslip insurance is a compulsory condition of registering a vehicle for the road. Basically if it’s on the road, it’s on a Greenslip.

That’s the compulsory insurance that each car must have – but what about non-compulsory cover? There are three types to choose from:

Third party property damage

This type of insurance is the most basic and will cover you for the damage caused by your car to other people’s property, in the event of an accident. Even though any damage to your own car caused by your poor driving is not covered, Third party property damage will cover you if your fourth-hand jalopy runs into the back of that brand new Porsche at the lights. Without Third party property, that could be a very, very costly mistake.
Third Party Fire and theft Cover

This next policy will cover the damage to your car as a result of fire or theft as well as provide cover for damages caused by your car to other people’s property. Basically, this is the cover to have to protect yourself against the type of people who make the front page of the newspaper for stealing a car, joyriding in it and leaving a trail of destruction in their wake.

Comprehensive Car Insurance

As the name suggests, this is an insurer’s most extensive policy. It is also the most commonly held non-compulsory policy in Australia. Basically, with this policy you should be covered for most damage done to your car as a result of collision, flood, fire, storm and theft. It also includes cover for damage to other people’s car and property as a result of a collision involving your car – no matter who is driving.

Ultimately, of course, the decision of which level of cover you choose depends entirely on you and your circumstances. The biggest complaint that most people have about insurance is that they pay money for premiums that they will probably never use. They might think insurance is a waste of money – right up until it isn’t!

And with over 17,000,000 vehicles on the road in Australia at last count, can you be so sure one of them isn’t headed for your car?