Many people are unaware of the many risks involved in being uninsured. Uninsured motorists are left financially vulnerable if they do not carry auto insurance, which may mean that they could become completely destroyed financially if they are involved in a car accident.
If you feel lucky, think again: According to the Insurance Statistics Australia, about 13 percent of those drivers with comprehensive car insurance coverage had an accident, with an average cost of $2,500. In addition, about one in 300 cars were stolen during 2007, with an average claim of about $6,500.
It is important to understand that if you do not have car insurance, you are unprotected if your car is stolen or vandalized, if a friend or family member borrows your car and wrecks it, if you damage another driver’s vehicle, or if you simply damage your own vehicle. You may think you are a good driver, but keep in mind that other drivers can cause accidents, or even that the weather may play havoc where you live and cause floods or fires that damage your car. Consider how you will manage without your car in the event it is damaged and un-driveable? Many finance companies also will not approve finance for your vehicle unless you have a full comprehensive insurance policy taken out on it - this reduces their risk in the event your car is destroyed.
With that said, your vehicle insurance is just as important as your car, in so many ways. The following are basics of the car insurance policies available in Australia:
- Comprehensive Car Insurance- pays for damage to both your vehicle and others in the event of an accident. Comprehensive Insurance also covers for damage to your vehicle that is not due to a vehicle accident. This may include theft, hail or flood damage, fire, or collision with animals. You may also choose to have the value of your car at market or agreed value. This will vary with individual insurers so ensure you are clear before taking out any policy. This policy offers the highest level of coverage available for your car. Many insurers will have varying options available such as paying a higher premium in exchange for a reduced excess or the provision of a hire car in the event of your vehicle being damaged. Be warned though, some of these options can make your car insurance premium quite costly so shop around and be aware of all the options before making your decision.
- Third Party Fire & Theft – covers you for loss or damage to your car if it is stolen or catches fire in addition to your liability for damage caused by your car to other people's property. This type of policy can be a great option if the value of your car is under $10,000 as many of these policies are limited to $5,000-$10,000 coverage.
- Third Party Property Insurance – covers your liability for damage caused by your car to other people's property. Usually the most affordable policy. Many people will choose this policy as the most cost effective solution for a cheaper car. Some policies may also includes a limited amount of cover if your car is damaged in a no fault accident with an uninsured vehicle. However your vehicle will not be covered for theft with a policy like this so if you place great value on your car its advisable to go with a policy that offers more coverage.
It is important to work with a trusted, established car insurance company to make sure that you are protected against any injuries or damages, and that the car insurance policy fits both your budget and your lifestyle. Always make sure you read through the fine print to be aware of what you are and are not covered for!
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