Irrespective of where you live in Australia, if you have purchased a vehicle or motorcycle and want to use it on the road, you must have vehicle insurance. The law of the land dictates a person to purchase an insurance policy while registering their vehicle. It applies to all states, except in New South Wales where you may buy the policy in a separate step before renewing your vehicle registration.
You must pay the premiums to your insurer. In case of an untoward road incident, your insurer or the underwriting body pays for the claims. So, you don’t have to empty your pocket to clear the dues of accidental damages. On the flipside if you don’t have Comprehensive Car Insurance in place you may have to spend excessively on fixing damages to your car and nursing the wounded third party as well.
While third-party liability coverage known by the term – “Compulsory Third Party (CTP)” is a mandatory insurance as per the law, a car owner like you may take a step beyond that and buy a comprehensive car insurance policy. This is a vast package that financially safeguards you in crisis events like accidents, theft, weather events, and so on. It is completely in your discretion to get a broad-ranging cover for your car based on your usage and needs.
Continue reading to learn more about how car insurance works and how it may help you.
Whether it is two-wheeler insurance or motorcar insurance, the policy provides financial security in case of wide-ranging unexpected events. Insurance is a method where the insurance service provider creates a shared risk pool by collecting small contributions in form of premiums from all the distinct vehicle owners who are insurance clients/customers.
In the event of a vehicle accident or theft, you can file a claim for repair costs or vehicle replacement to cover the value of the damaged/stolen car or bike. It establishes a risk-sharing approach in which multiple individuals assist one another when needed. In case you maintain your vehicle well and safeguard your ride, you may also file for a No-Claim Bonus. The insurer would acknowledge your care and caution towards your insured car.
There are majorly two types of vehicle insurance – mandatory and non-mandatory. The mandatory insurance is a ‘compulsory third-party’ policy. You just can’t buy an automobile without purchasing CTP which covers financial compensation for people injured/killed due to an accident involving your car. However, it does not cover any damage to your own vehicle or damage you cause to others’ vehicles or property.
Car Insurance Quote covers damage to your vehicle and damage to third party vehicles/property. Along with the added benefits like covering you for damage or loss caused by fire, theft or weather events – it is much greater protection to the money stashed up in your bank account. As a result, you may file an insurance claim if your car is damaged or stolen.
However, your car insurance policy does not cover situations such as:
- Depreciation of car value.
- Reimbursement for damages that occurred due to driving while intoxicated or without a licence.
- Breakdowns in the electrical and mechanical systems of the car due to everyday wear and tear.
- Car services or pink slips.
In vehicle insurance, depending on your insurance provider, your car’s value on the insurance policy will either be the agreed value you’ve decided on with the insurer or the market value. Deciding on aforementioned factors along with your excess amount will be a couple of final decisions you will make before taking out your car insurance policy with your chosen provider.