Are you looking for car insurance but don’t know where to start? Don’t worry, we’ve got you covered. Here are five tips from finder on what to look for in a car insurance policy.
1. The type of insurance you need
Figuring out the type of insurance you need depends on knowing the type of cover you want and how much you want to spend. For example, if you don’t want to spend much money on covering your car but still want protection from damage to other people’s property, then you’ll want third-party property coverage.
If you’re not too worried about the cost and want a high level of cover for things like theft and damage to your car in addition to cover for third parties, then you’ll want to look at comprehensive cover.
2. What’s covered by your policy?
Look, I get it. This all sounds pretty straight-forward so far, but you’d be shocked by the number of people who make a claim on any number of insurance types only to find out they didn’t have cover. Insurance policies can be tricky and it’s easy to get tripped up because you assume that you’re covered for something.
This is why it’s so important to make sure you read all of the policy documents and understand what is covered. Not only could you be liable for damages you’re not covered for but in the case of CTP, a pretty hefty fine as well.
3. Are you eligible for any discounts?
This is something you should be looking at, not only when you buy car insurance (↗) but also at renewal time each year. The following are some of the various discounts available to you:
No-claims bonus. If you are already with an insurer, this is a good one to be aware of as it rewards you for each year you are with an insurer without making a claim. This discount normally caps out after around five years and varies depending on the insurer.
Multi-policy discounts. If you’ve got policies with various insurers, look to consolidate them with a single insurer. By the same token, if you’re just looking for car insurance but already have a home insurance policy, check to see if your current insurer offers multi-policy discounts.
Online discounts. You can save with many Australian insurers, including Budget Direct, Virgin Money and AI Car Insurance, just for buying your insurance online.
Restricted driver. If you’re willing to exclude drivers under 25 from being able to claim on your policy, some insurers, such as Real Insurance, will offer you discounted car insurance premiums.
4. Not all excesses are created equal
If you’ve ever had any form of insurance, you’re probably aware of the concept of an excess. However, what you may not know is that there are a number of excesses that apply to a car insurance policy.
It’s important to have a look at the policy and understand those excesses and which might apply to you. For instance, you might have a teenager that you’re teaching to drive, so you’ll want to check if there is a non-nominated driver excess (↗), age excess or inexperienced driver excess. Doing so will not only allow you to know what’s covered by that policy but also compare it to other policies on the market that might not be as scrupulous.
5. Do you need agreed or market value car insurance?
Deciding whether you want agreed or market value will basically come down to one thing: how much do you want back in the event you total your car? However, both have their pros and cons:
Pro: Market value will mean that your car is cheaper to insure each year.
Con: Your car may not be worth as much on the “market” as you’d like.
Pro: It is the standard arrangement.
Con: As you’re only receiving market value for your old car, you may be considerably out-of-pocket when looking to buy a new car.
Pro: You know exactly how much you’ll be getting in the event of an accident.
Con: You’ll be paying considerably more year-on-year than someone with market value cover.
Pro: Since you’re setting the amount, you can choose to insure a vehicle for less than its market value and save yourself money.
Con: You may be required to go through a valuation process.
6. Modify your car at your own peril
If you’re considering modifying your car you might want to think twice, as it may not only affect your premium but it could also stop you from being able to insure your car at all. Modifications can range from subtle add-ons like horns and changing the suspension to lurid changes like tinting, modified exhausts and custom paint jobs.
Before you make any of these changes, get in touch with the insurer to see if they will in fact offer you cover with the mods – and if so, will these changes affect your premium.