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Car Insurance Tips & Advice

published  First Published: 24/01/2010
Article written by: Darryl Houston
Think about the following points when purchasing a new car, or renewing your car insurance.
 
Point 1 - Think about insurance as part of your research into buying your new car.
 
Factor in insurance costs before you buy a car. If youre under 25 and buy that V8 supercharged rocket before you price the insurance costs, you may be in for a supercharged shock at the price, and that's if you can find an insurance company that will insure you.
 
Even ordinary sedans like the Falcon or Commodore can vary in premiums depending on the insurers loss ratio suburb to suburb, and factoring in the drivers profile.
 
Point 2 - Shop around and compare prices.
 
Premiums can vary by as much as 300 per cent for the same driver at different insurers.
 
Why? I hear you ask. Each day insurance companies look at their losses, or claims. If the make and model of vehicle you are looking at insuring has been involved in a high number of thefts for example in and around your area, the premium for that car make and model will increase from that insurance company. If the same insurance company also found a certain profile of driver was making accident claims on a particular vehicle, up goes the premium for all people applying that fit that profile.
 
The answer is to compare insurance companies premiums, making sure of course that you are comparing the same level of cover with each one.
 
Often insurance companies will offer what sems to be cheap, but then you find when you try to make a claim that you were not covered for that!
 
There are businesses that compare insurance premiums for you, and are called insurance brokers. One such business is found on http://www.loans-australia.com.au/insurance/comprehensive-insurance where an insurance broker will hunt around and try to find the best premium for you, taking your profile and vehicle into account. You can even compare comprehensive insurance premiums with your current comprehensive car insurance, to make sure you are not paying too much.
 
Point 3 - Get third party cover as a minimum

You dont have to insure your car with comprehensive insurance unless it is under finance in Australia, but Third Party Property (TPP) is usually regarded as the minimum. Otherwise hitting a $100,000 Porsche and being handed a big bill, via a lawyer, plus fixing your own damaged car could bankrupt you.

Third Party Property is the cheapest way to get insurers to carry this risk and its commonly used for old or exotic cars which can be expensive to insure comprehensively.

It can cover damage to others property to Millions. Imagine damaging a house.

Third Party Property (fire and theft) insurance is the most basic way of covering damage to your vehicle as well.
 
Point 4 - Think comprehensively
 
Comprehensive motor insurance, covering any damage done to your car or caused to others, is most common in Australia.
 
Paying a higher excess will reduce premiums, so you might pay the first $1000 of damage. All companies offer no claim bonuses (usually maintained if an accident is not your fault).
Some discount premiums if customers bring home insurance or other business as well as their car. Drivers over the age of 25 can also get discounted premiums.
 
Point 5 - Be upfront and check the fine print
 
Insurance companies only check your application details when it comes to paying out on a claim, so make sure that you are telling the truth. They will decline paying out if they find you have not been honest in your answers to their policy proposal.
 
Also it makes sense to read the PDS or Product Disclosure Statement that every insurer must supply you by law, before you decide to purchase. Then you will know what you are, and what you are not covered for.
 
Some insurance companies will allow young drivers with their own car to drive the family vehicle occasionally, if they are told upfront and its not a Porsche! Or they might add a surcharge.
 
There are plenty of examples of Dad saying on his insurance proposal that his son will only be driving the car 20% of the time to get a lower premium, yet young 'Johnny' drives it 4 times a week to football, 4 times to his girl friend's house. In the event of an accident involving Johnny, the insurance company will do some checking and you would not believe what they can uncover. 
 
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