Do you know what your car insurance policy covers?

Most of us don’t give much thought to our car insurance after the initial purchase of the policy. We often just assume that we’ll be covered if we’re in a car accident and everything will be fine, but that’s not always the case and in making these types of assumptions you can find yourself in serious trouble if you’re involved in an accident.

The devil is in the details
Car insurance policies aren’t exactly an exciting read, in fact they can be downright mundane to read. But it’s critical that you understand exactly what your policy states before you purchase it and how this information will affect you after you have chosen it. Auto insurance providers know exactly what is written in the fine print of their policies and so should you.

What’s the difference?
It’s important to distinguish between the coverage offered by the three major insurance types in Australia: CTP, Comprehensive, and Third Party Property Damage insurance.

CTP (compulsory third party) insurance - CTP insurance must be purchased before you can register your car in Australia. This type of insurance will protect you or any driver of your car against liability for personal injuries caused to third parties as a result of an accident. Importantly, CTP insurance does not cover injuries that you or the driver of your vehicle might sustain nor does it cover any damage caused to property.

Comprehensive insurance -this type of insurance provides coverage for your car and any damages that you may cause to the property of others. This is the most encompassing coverage and is also the most expensive.

Third Party Property Damage insurance – this insurance covers damages caused by your car to the property of third party owners when involved in an accident.

Not every car insurance policy is the same
All three major types of insurances are different in the type of protection that they offer, which is why after purchasing your Compulsory Third Party insurance (known as a Green Slip in NSW), there are Comprehensive and Third Party Property Damage options available for property damage covers.

Each individual company may offer different levels of coverage under their car insurance policies. Therefore, you can’t assume that the policy you may get from one provider will be exactly the same as the one you get from a new provider. Even policies that are renewed each year with the same company can change, so it’s important that you read any endorsements, Product Disclosure Statements and any Supplementary Product Disclosure Statements that are provided with your policy.

It’s important that you know what your insurance policy will cover if you’re involved in an accident and what you’ll be personally held responsible for, before it’s too late.

To find out details of our Car Insurance policies click here.