If you have your own car, then it’s extremely likely that you’ll be required by law to carry some form of car insurance. Similar to how everyone in the United States is required to maintain liability coverage, motorists in all states and territories of Australia must maintain, at a minimum, compulsory third-party insurance (CTP). You’ll have plenty of choices for acquiring CTP insurance, also called the Green Slip, and you can compare insurance companies online to see what the best rates are for you and if you’re eligible for any discounts.
CTP is a basic form of car insurance that’s meant to offer compensation for any third parties who may have suffered bodily injury or been killed in a car accident with the insured vehicle. This also extends to cyclists and pedestrians, in addition to any drivers or passengers of vehicles involved. This compensation is meant to cover typical damages such as medical expenses, further treatment and rehabilitation costs, and any lost income due to time spent away from work after the accident in the case of injuries.
In the case of wrongful death, these plans provide coverage for final expenses and punitive damages. This insurance coverage will also cover blameless accidents, though it’s important to remember that an at-fault party won’t receive the same benefits as others involved in the accident.
Is CTP all you need?
While compulsory third-party insurance is the only vehicle insurance policy you’ll be required to get, it isn’t necessarily enough for all (or even most) drivers. For starters, minimum coverage won’t provide compensation for any property damage, even if the car is a total loss. There are a few ways you can obtain coverage for property damage, including purchasing Third Party Property insurance.
It’s also important to note that the providers available to you and the process for obtaining insurance can differ based on what state you’re in. In NSW, ACT, and Queensland, for example, a compulsory third-party plan isn’t included as part of your vehicle registration fees, so you’ll need to actually research insurance companies, even for this basic coverage. If your CTP coverage is included in your registration fees, you may be limited to a specific insurance provider for that state.
If you want to ensure that you’re covered for damages to your car beyond collision coverage, you’ll need to look into comprehensive coverage. Essentially, comprehensive insurance will cover your vehicle if it’s damaged due to wind and other natural occurrences if it’s damaged by a break-in or vandalism if it’s crushed during a collapse, and many other causes. This type of car insurance policy is completely optional in most cases, but if your car is financed, you may be required to obtain comprehensive coverage.
What affects your rates?
Premiums for any insurance policy will be determined by a variety of factors, although compulsory third-party plans have a price range that they’re required to stay in, so minimum coverage is generally affordable. As with any car insurance policy, CTP premiums will partly be determined by your location and the type of vehicle you’re trying to insure. Generally, the order from cheapest to most expensive is motorcycles, cars, and then trucks.
Of course, there are also risk factors that must be assessed on a case-by-case basis. One of the most important is your driving record. If you have a lot of accident history, you can expect an additional charge. Conversely, a safe driver may be eligible for deductions. Auto insurers will also be interested in the age of the vehicle, as well as the driver. Younger drivers are less experienced, so they’re considered a higher risk. An older vehicle is also more likely to give trouble, so they’re considered higher risks as well.
Ultimately, you may want to speak with a financial advisor and insurance agents to find the cheap car insurance that fits your needs.