Car insurance has become essential for Australians due to increasing road accidents to stay protected when driving.
There are three types, third-party property damage, compulsory third-party, and comprehensive car insurance.
In this blog, you will learn about these insurances, what they cover, the cost, ways to lower premiums, and how to choose the right one for your needs.
1. What Is Third-Party Car Insurance?
Third-Party Car Insurance, also called Third-Party Property Damage, covers the damage caused to someone else's vehicle or property. Paying an additional premium can also protect against damage or loss of your car caused due to theft or fire.
Thus, with this insurance, you can get money back for the repair cost of someone else's property or car, including the legal expenditure arising from an accident.
However, this insurance doesn't cover the repair cost of your damaged car. It also doesn't expenses incurred to treat injuries you have caused to other people (if you are liable for the accident).
2. Types of Third-Party Car Insurance
Third-party policies are available in two types:
3. What Is Covered By Third-Party Insurance?
Budget Direct is a leading provider of car insurance that covers your liability for a wide range of accidents caused to other people's property, including vehicles.
Let's find out about the third-party car insurance budget direct:
|Benefits||Third-Party Property||Third-Party Fire and Theft|
|Basic Liability Cover (for damages incurred by another person on their property)||$20 million max||$20 million max|
|Damage caused due to an uninsured driver||$5,000 max (that includes towing, recovery, and storage costs)||$5,000 max (that includes towing, recovery, and storage costs)|
|Fire damage||Not covered||Yes|
|Hire a car after theft or attempted theft||Not covered||$5,000 max for up to 14 days if your vehicle isn’t found or while repair works are being done.|
4. How Is The Third-Party Car Insurance Cost Calculated?
The following factors impact the price of a third-party car insurance policy:
The required level of cover
Type of vehicle
The brand and model of the vehicle
The vehicle's age
Your driving record
Your address (state/territory where you live in)
Any aftermarket upgrades
You can find free comparison websites online that provide quotes based on the above user details in just a few minutes.
The price of the premium depends on the following things:
The possibility of the user claiming your policy
The chosen options
The overall cost of claims that the insurer will need to reimburse
Other commercial factors
5. How To Reduce The Third-Party Property Damage Insurance Cost?
You might get a slight reduction in your premium price. Some of these include:
Do not allow anyone below 25 years to drive your car.
Go for a higher excess at a lower premium.
Check the Product Disclosure Statement to find options for specific policies and providers.
RACV third-party car insurance offers a 10% discount when you take out two or more eligible insurance products. RACV members can save on their policy premiums by choosing an annual payment. They also get e-gift cards and exciting discounts on attraction tickets or movie tickets by purchasing an RACV insurance policy online.
6. How Frequently Do I Need To Pay Car Insurance Premiums?
The third-party property damage car insurance only covers the cost of damage to another person's car or property if you are responsible for that accident and the damage caused.
There are chances that the accident can cause significant damage to your car. As this insurance doesn't pay for the damage costs of your car, it can be a considerable expense and take away your hard-earned savings.
That's where comprehensive car insurance might be worth considering. This insurance covers your car against theft, fire, or accidental damage and gives you mental peace.
Hence, comprehensive car insurance benefits third-party damage and protects your vehicle against theft, fire, and other insured events.
In addition to the above, you also get a few other benefits that include:
Belongings in the car
Urgent travel, repair, and accommodation costs
Replacement of an old car with a new one
Replacement of the windscreen
Hire car costs
Legal liability cover
Replacement of lock and keys
For these added benefits and extensive coverage, comprehensive car insurance is more expensive than that third-party property insurance.
7. What is the Price Difference Between Comprehensive And Third-Party Car Insurance?
The below table compares the price of both policies offered by top car insurance providers in Australia:
|Insurer||Third-Party Insurance||Comprehensive Insurance|
8. What Is Compulsory Third-Party Car Insurance (CTP)?
This insurance is mandatory in all states of Australia. You can’t register a car without buying Compulsory third-party car insurance in NSW, also called Green Slip.
The insurance covers your accountability for injuries or death caused by you or other drivers of your four-wheeler to road users while using your car. It ensures the claims for the losses and damage against you or your car driver for the injury he has caused to another person.
In most states, CTP insurance comes with your car registration. When you buy a CTP policy, the premium for this scheme goes to the insurer.
It is compulsory to buy the insurance separately before renewing your car registration. Service NSW provides an online or on-the-phone service to renew your car registration for six months.
If you are extending for six months, the CTP insurance has to be for the same duration of six months.
Check the regulations and requirements for CTP insurance in the states of Australia:
9. How To Get Cheaper CTP Insurance?
CTP insurance costs depend on the state/territory where you live. There is a single CTP underwriter in some states in Australia, where the CTP premium comes with your registration.
You can find multiple CTP insurers in Queensland, Australian Capital Territory, South Australia, and New South Wales.
The best way to find the cheapest third-party car insurance in NSW is to get quotes from insurance companies and compare them.
The Green Slip calculator helps get the best price from all CTP insurers. Enter the vehicle and driver details correctly to get the best green slip price.
This calculator only works for the most common vehicles, not heavy vehicles such as trucks, fleets, or buses. All the prices are from the State Insurance Regulatory Authority website.
Here are things that you need to enter into the calculator to get an estimated price of your compulsory third-party insurance:
Date of commencement of your vehicle registration
Vehicle manufacturing date
Ownership: Individual or Company
Use: Business or Personal
Are you a GST-registered business?
The number of kilometres that your vehicle travels every year?
Do you have an existing green slip?
Do you hold any other vehicle insurance?
Age of the youngest driver
Gender of the youngest driver
Number of demerits points lost by the driver/owner on their driving license
Have any of your car drivers met an accident due to their mistake in the past five years
Have any of your drivers had license suspensions, limits, or debarments in the past three years
Do the drivers hold a valid NSW driving license?
Do any driver/s hold a provisional driving license?
How long has the least experienced driver had a driving license?
How many years has the car owner been an NRMA member or had NRMA insurance?
You may need to wait until your driving record gets more reasonable to get a better green slip price. Click on the link for a detailed Compulsory Third Party Car Insurance Compare In NSW.
10. What Discounts Do You Get When You Buy A Green Slip?
After comparing the insurance cost, consider the discounts that insurers offer on their policies to decide on the best green slip insurance.
There are currently six insurers: AAMI car insurance, Allianz, GIO, NRMA Insurance, QBE, and YOU, that offer green slips to car owners in NSW.
Only two insurers, NRMA and GIO, offer car owners discounts on other vehicle insurance products with a CTP green slip.
In the case of a “No Claim Discount” of a minimum of 60% on Comprehensive Insurance, GIO gives a flat discount of $50 on your Comprehensive Insurance.
Third-party car insurance NRMA gives loyalty discounts ranging from 5% to 12.5% on other insurance products if you buy green slips.
11. Third-Party Vs Comprehensive Car Insurance Vs CTP Insurance
A common question among car owners is how third-party property damage differs from compulsory third-party insurance.
Here we have listed the key differences between both policies:
Third-party property damage insurance only covers damage caused to the vehicle and property of another person. It doesn’t cover roadside assistance and damage due to theft, weather events, accidental damage, and vicious car damage to your vehicle. These benefits may be available with higher plans.
Comprehensive car insurance compensates for a broad range of damage caused due to an accident, fires, theft, and weather events (hail, storms, and cyclones.) It also covers you for damages to someone else’s property and car, offering a new vehicle and windscreen replacement.
Compulsory Third Party Insurance (CTP) or Green Slip covers the legal liability of injuries caused to others if you are at fault for a motor accident. It doesn’t cover the expenses incurred due to damage to your or others’ vehicle or property.
Compulsory Third Party Insurance is mandatory for all registered cars in Australia. Any other vehicle insurance coverage you take out besides CTP is optional.
Some states allow you to choose your CTP insurer, while others do not.
With Third-Party Property Damage insurance, you can compare and select the best provider from various insurance providers suiting your insurance needs regardless of your location in Australia.
12. What Happens To Third-Party Property Car Insurance If I Change My Car?
If the insurance owner wishes to sell his car, the cover benefits will directly pass on to your new car for up to 14 days.
13. How To Decide on The Right Car Insurance?
The type of car insurance you choose depends on your needs. Here are a few things you must consider when buying car insurance:
Calculate your car value against the premium and insurance excess amount. Based on this calculation, decide which car insurance will give you the best value and coverage.
Consider the risks for which you want to get your car and drivers covered. Find out whether you need protection against car theft and fire.
Whether you can afford the cost to repair someone else’s vehicle or if you can’t, you need car insurance based on your situation.
After getting an idea of what coverage you need, you should now understand the available third-party car insurance to find the right one.
Third-Party Car Insurance
Third-party car insurance provides less coverage than comprehensive car insurance. It doesn’t cover your car against damage caused due to accidents, weather events and theft.
However, it covers the legal responsibility of your car’s driver if he causes damage to the property of other people while driving.
This insurance is for those who need cheaper insurance, drive a less valuable or older car, or can not afford the repair costs if any damage happens to their vehicle.
Comprehensive Car Insurance
It offers third-party property damage benefits and compensates for accidental damage to your vehicle and driver for any damage while driving.
This insurance is a good option for people with expensive cars who want better coverage and financial protection against damages to their and others’ vehicles.
You can take an intermediate option to avoid buying an expensive comprehensive cover. For example, third-party fire and theft insurance cost less than comprehensive car insurance provides. It will provide some protection for your vehicle.
Car insurance is one of the best investments. It gives mental peace to people knowing their finances will not take a hit when their car has an accident.
The right car insurance will save you from potentially costly repair bills incurred due to car accidents.
However, to make the most out of your insurance, you should carefully assess your insurance needs so that you don’t pay more than you should.
Reading product disclosure statements before buying car insurance will help you form an informed decision.
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