Comprehensive insurance

Comprehensive motor vehicle insurance is the most popular type of insurance available for your vehicle. The policy covers the cost of repairing damage to your own vehicle, as well as third party property damage, to cover damage to anybody else’s vehicle or property. Theft cover is also included.

 

Most policies are arranged on a "market value" basis. This means that if your vehicle is stolen and not recovered or damaged beyond repair, the insurer pays the current market value of the vehicle at the time of the claim.

 

Premiums for comprehensive insurance are based on a number of factors. These include:

• Type of car
• Age of the youngest nominated, driver
• Driving record of the nominated drivers
• Claims history 

If you have a high performance vehicle, are under age 25, or have an adverse driving and claims history, this can substantially increase the premium you will need to pay.

 

Third party property damage insurance

This type of policy only covers damage that you cause to another person’s vehicle or property. It doesn’t provide any cover for damage to your own vehicle.

 

Third party injury insurance

Dependant on which state you live in, this policy is either included in your registration or must be taken separately (sometimes known as a green slip). It is compulsory in all states and territories of Australia to have third party injury insurance. As the name suggests, it only covers injury resulting from a motor vehicle accident. This insurance doesn’t cover any injury to the driver if the driver was found to be at fault.

 

Common terms explained

 

No Claim Bonus: This is a system where you accumulate a bonus for claim free years. The bonus is a percentage discount of your premium. For the first claim free year, you receive 20%. Each claim free year after that, you receive a further 10%, up to a maximum of 60%. If you have only had third party property damage insurance in the past, most insurers will recognise two years of every claim free year for 10% no claim bonus.

If you are at fault, each claim reduces your no claim bonus by 20%. Note that if you have an accident and are not at fault and can identify the other party, you don’t lose any no claim bonus. Many companies also offer the facility to protect a maximum no claim bonus, meaning whether you are at fault or not you will not lose any no claim bonus.

 

Market Value: The current market value of your vehicle, usually at the time of the loss.

 

Agreed Value: A fixed amount that your car is insured for, which would be paid in the event of your vehicle being stolen and not recovered or damaged beyond repair. In most cases the premium is higher than for a market value policy.

 

Excess: This is the amount that you must pay towards any claim. Note that if you have an accident and are not at fault and can identify the other party, you won’t have to pay your excess.