Whether you’re checking out the beautiful scenery across the country, or simply driving to work, the preferred mode of travel for many Aussies is by car. While most people are careful behind the wheel, accidents are difficult to avoid, which is why it is important that every driver has the most suitable car insurance tailored to their lifestyle.
The two main categories of car insurance are comprehensive and third party. The following will explain what each type covers, as well as the main differences between the two.
Comprehensive car insurance is the policy that insures your car across numerous categories, rather than just one. It is generally the recommended policy, since it can help protect the consumer across almost all unforeseen circumstances.
Comprehensive insurance is the most extensive policy you can have for your car, since it covers both damages to your car and the consequent damages your car may inflict. With the exception of compulsory third party (CTP) – which has to be purchased separately – comprehensive cover generally includes third party policies such as property, fire and damage.
Comprehensive cover can also provide protection in cases where you’re not behind the wheel. For example, various companies provide cover in cases of natural disasters and accidents that don’t involve other drivers. So if your car gets damaged by hail, storms or other inclement weather, a comprehensive policy should be able to cover it.
While comprehensive insurance is a reliable way to cover your car, it is also important to note that there are usually various optional extras that aren’t automatically included in your policy. Some of these optional extras may include:
Since comprehensive policies cover a multitude of areas, it is also the most expensive. If you are on a more restricted budget – and don’t believe your car needs to be protected against damage – third party car insurance may be a suitable alternative.
In any accident involving a vehicle, there are three parties involved: the insurance holder, the insurance company, and the damaged entity, whether it’s a person, car or property. With this in mind, third party car insurance is a type of cover that specifically targets damages inflicted upon other people or property by your car. This can be of vital importance, since you can be liable for accidents involving your car, which could be a massive hit to your bank account.
Third party car insurance is generally the most economical choice, since you can choose specific scenarios in which to cover your car. For example, if you are involved in an accident that’s deemed your fault, compulsory third party (CTP) would help cover the other injured party, whereas third party property specifically covers you in cases where your car damages other people’s property.
Since individual third party insurance policies only cover specific scenarios, it is important that you know how the policy you choose is going to protect you. The following are types of third party policies and what they cover:
Compulsory third party: covers injuries or death to others involved in an accident. This level of insurance is mandatory for all registered drivers and should be the bare minimum cover every driver should have.
Third party property: covers damage to the property of others. Examples would be if your car hits a sign post or smashes through a store window.
Third party property, fire and theft: similar to third party property, it covers the damage you may do to property, but additionally covers your car in cases of theft and fire damage.
|Covers most areas.||Covers one specific area.|
|Covers both you and the other participant.||Only covers the other participant.|
|Not compulsory||Compulsory third party is required by every registered driver.|
|More expensive form of car insurance.||More economical form of car insurance.|
There are many car insurance companies in Australia, so finding the best value car policy tailored to your needs can be challenging. Compare the Market can minimise the burden with our car insurance comparison service. In just minutes, you can find the cover that suits you. Simples.