Common types of car insurance in Australia

Whether you’ve just recently passed your ‘L’s test or a seasoned driver with years of driving experience to your name, no one is 100% immune to accidents. At Ascent Lawyers, we strongly suggest that all drivers alike to take out car insurance.

When it comes to car insurance, most people’s initial reaction is to spend as little as possible. In Queensland, all registered drivers are required to be insured to a minimum extent. However, a person can purchase additional insurance to protect themselves, though this will ultimately depend on their financial situation and how content they are with their insurance.

Here are the common types of car insurances:

1. Compulsory Third Party (CTP)

CTP insurance is required by every registered vehicle in Australia. Normally, you will pay for CTP at the same time you register your vehicle.

CTP insurance is designed to compensate people injured or killed in a car accident who are not at fault for the accident. That is, your CTP insurance will pay for any injuries that your vehicle has caused to other road users if you or the driver of your vehicle are responsible for the crash.

A CTP insurance claim can be made by any person injured in a motor vehicle crash, such as the other driver, passengers of either vehicle, pedestrians, cyclists, and motorcyclists.

Your injuries will not be covered by CTP insurance if you are responsible for the car crash.

Likewise, CTP insurance will not cover damage to vehicles or properties caused by the crash.

2. Additional Car Insurance Options

2.1 Third Party Property Damage  Insurance

Third party property damage insurance covers for damage caused by your vehicle to other vehicles and property. It does not cover damage to your own vehicle.

2.2 Third Party Fire and Theft insurance

Similarly, third party fire and theft insurance covers for damage that you, or the driver of your vehicle, cause to other people’s cars and property. It also covers you if your vehicle is stolen or damaged by theft or catches fire.

2.3 Comprehensive Car Insurance & Comprehensive Plus Insurance

Comprehensive car insurance covers for damage to your car and other people’s vehicle and property. Plus, it also insures for damage to your vehicle caused by weather, natural disasters, vandalism, fire and theft, and other types of non-collision losses.

Some comprehensive car insurances offer additional benefits, like roadside assistance or a hire car.

Depending on the policy, it can provide a new car replacement if your car is written off or coverage over valuables damaged in the crash, like computers or mobile phones.

As the highest level of car coverage available, comprehensive car insurance is the most popular option available. It is also the most expensive option.

Note: You cannot claim for losses arising from malicious arson. If you suspect that your car was damaged by malicious arson, you should notify the police as soon as possible.

3. Which insurance is suitable for me?

This is completely dependent on your individual needs and financial circumstances. As there is no one answer that applies to every car owner, consider asking yourself first:

How much cover do I need? What is the market value of my car? Will I be able to afford the repairs for my car or someone else’s car if I cause a crash? Do I live in an area more susceptible to theft or fire?

With this brief overview, you should have a better understanding of the types of insurance available and what they cover and do not cover.   We often encounter clients who complain about the cost and refuse to take out additional car insurance.

At the end of the day, the money that you spend on car insurance benefits both you and your loved ones. Although it will not solve all of your problems, it provides a peace of mind that is most valuable.

If you or someone you know has been involved in a car accident, please consider reading our article on how to deal with property damage in Queensland.

Otherwise, if you have any questions about car insurance or car crash compensation, contact one of our compensation lawyers for assistance.