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Unlike compulsory third party (CTP) insurance, comprehensive car insurance is an optional extra - and sometimes an expensive one at that. However, when considering the cost of losing a vehicle to accidents or theft, it seems a small price to pay to be safe rather than sorry.
Comprehensive and CTP - what's the Difference?
Most CTP insurance (also known as a green slip) covers all parties involved excluding the driver. So, without any comprehensive insurance, there's a huge risk of out-of-pocket expenses in the case of an accident.
Comprehensive insurance can cover anything from the replacement of baby seats to legal representation. In some cases, not even comprehensive insurance will cover a driver who is at fault for injuries sustained, so it's worth shopping around for both policies. Policies can vary drastically, so you may even find a high level of cover in a CTP insurance policy. For instance, NRMA will provide up to $250,000 cover for at-fault drivers under their CTP insurance policy. You will also find that policies for both Comprehensive and CTP insurance vary on a state by state basis.
What is comprehensively covered?
Comprehensive car insurance usually covers a vehicle for accidental damage, theft and fire. In some policies, liability cover may also be included if damage is caused to someone else's car or property - sometimes up to as much as $20 million.
Some policies are more flexible than others, allowing you to pick and choose form various benefits you may need, while omitting those from your policy you won't. For instance, some policies will pay for a hire car for a certain period of time if yours has been stolen or damaged, with further options for other types of incidents.
Other extras may include windscreen cover, personal contents, damage from storms or floods, replacement of keys, locks or barrels, and uninsured motorist damage. In some cases, modifications to your car can also be insured, but you will need to fully disclose what they are with the insurer.
How much does it cost?
While applying can be as easy as a phone call or filling out an online form, the actual cost of a policy is occasionally a grey area. Factors used to determine the price of a policy include the age of the car and driver, history of accidents, and whether or not the vehicle mostly operates in a high-risk area for theft. In addition to these factors, prices vary a great deal between insurers, so it's worth shopping around before making any decisions. The price of the policy may also vary depending on whether or not you hold any other policies with the insurer (such as your CTP slip) and for how long you have held them.
The type of vehicle being insured may also be a deciding factor when it comes to price. For instance, a 39 year old male living in Noble Park, Victoria, will have to pay a $425.26 annual lump sum fee for his Toyota Landcruiser Wagon RV 4.5L Auto, while another 43 year old man, living in the same area, will have to pay $534.31 annually for his Honda Accord VTI 22L Auto. The difference in price could simply be due to more Honda Accords being stolen than Toyota Landcruisers in Noble Park, or because of a difference in value of each car.
