While premiums are important, there are other factors to consider when you buy a policy
Car insurance may be a grudge purchase but it pays to choose wisely. One in seven motorists claim on their car cover each year, and it’s then that they may discover a super cheap policy has more holes than a dirt track. Here’s what you need to know to cut the cost of cover and avoid the hidden traps.
What type of cover?
“There is a common misconception that compulsory third party (CTP or green slip) insurance – a form of personal injury insurance – covers damage to cars. It doesn’t,” says Jonathan Kerr, chief marketing officer of Budget Direct.
In fact, CTP cover only protects the driver against legal liability for injury or death caused in an accident. If you want to insure your car, comprehensive insurance is regarded as the gold standard, providing cover for theft plus damage to your own car or someone else’s if you have a fender bender.
If you drive a banger, cheaper third party property damage is a better option. It covers the damage you cause to others, though not your own car.
The rule of thumb with any type of car insurance is to shop around – not just when you first arrange cover but each time your policy comes up for renewal. One in three Australian drivers has never changed their insurer, and loyalty doesn’t always pay. Research by Canstar shows average annual premiums for comprehensive cover range from $1000 in NSW to less than $700 in Western Australia and Tasmania. So there is plenty of scope to save.
That said, premiums shouldn’t be the only factor to consider. “You really must consider your own circumstances and look at the policy’s benefits and features as well as price, to make sure you’re getting the best value for you,” says Kerr.
This story is from the October 2018 edition of Money Magazine Australia.
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This story is from the October 2018 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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