Comprehensive covers the damages for both your vehicle and other involved in an accident, regardless of fault. It’s the highest level of car insurance available and also covers your car if it’s stolen or damaged by vandalism, fire, storm or hail. Depending on your policy, it can offer new car replacement for brand new motor vehicles written off (i.e. a total loss) within a year or two of purchase if you’re the first registered owner.
Comprehensive cover also allows you to add optional extras like windscreen excess reduction cover and personal effects cover.
Third Party Fire and Theft is similar to Third Party Property Damage insurance but will also cover the costs if your vehicle is stolen or damaged by fire. Keep in mind that it won’t cover the damages to your own vehicle in a collision.
If you cause damage to another vehicle or property, Third Party Property Damage will cover those repair costs. Note that it won’t cover the costs of any repairs to your car or property.
As the name suggests, CTP insurance is compulsory for all registered drivers. This insurance is designed to cover the death and injury of other people if you cause an accident while behind the wheel.
No, cover note insurance isn’t the same as cooling-off periods. While both ensure that your car is protected from the point of purchase while giving the option to swap or cancel the policy at no cost provided no claims have been made, there are some key differences between the two.
Cover note insurance gave you short-term cover until you purchased a more permanent policy. You didn’t have to pay upfront costs for cover note insurance and it was designed to give you time to weigh up your insurance options. Conversely, a cooling-off period isn’t something you purchase; it’s included when you take out car insurance. If you change your mind and haven’t made a claim during the agreed time frame (typically 14 days minimum), it allows you to receive a full refund for the cost of your insurance.
If you had purchased car insurance after obtaining cover note insurance, that new policy would still be subject to a cooling-off period.
Car insurance providers in Australia typically don’t offer cover for periods less than 12 months, meaning it’s difficult to find short-term car insurance. You always have the option of cancelling a policy even after a cooling-off period, but this may attract cancellation fees. In most cases, if you haven’t made a claim, you’ll be entitled to a pro rata refund of your unused premium.
If you’re driving a hire car for a short time, the insurance is generally organised by the hire car provider, which may come at an additional cost to you.
If you make a car insurance claim during your cooling-off period, you’ll still go through the claim lodgement process as normal. However, you won’t receive a full refund of your premium if you choose to cancel your insurance after making a claim, regardless of what you were claiming for (e.g. accidental damage, theft, roadside assistance).
If you buy a new car, some insurance providers let you transfer your car policy if you still have a period of insurance left on your current pay cycle. That way, you don’t have to go through the hassle of finding another policy for your new set of wheels.
When transferring your policy to your new car, you may need to pay an additional car insurance premium depending on the circumstances, which could include:
When the policy renews your new premium will reflect the vehicle it was transferred to.
Cooling-off periods differ between providers and car insurance products. Many have a 21-day cooling-off period, whereas others only have 14 days (which is the legal minimum required). Some may even have periods as long as 30 days.
You can view the details of your cooling-off period in your policy’s relevant Product Disclosure Statement (PDS). You’ll also find other policy information such as payout limits, exclusions, definitions, terms and conditions, so it’s always a good idea to read this document when considering a product.
Most car insurance policies will have a waiting period for specific events where you won’t be covered if you make a claim, this can sometimes be referred to as an embargo period. For example, you typically cannot claim for fire, storm, cyclone or flood damages that happen within 72 hours of purchasing a new car insurance policy. Details of any waiting periods applicable to your specific car insurance policy can be found in the PDS.
Some car insurance companies may let you claim for damage that would otherwise be uninsured because of a waiting period if you buy car insurance the same day as you buy the car. Also, if you switched policies and previously had the same level of cover, some providers may waive the embargoes s for specific events as well.