Pinpoint the best car insurance policy for your present situation.
Nobody wants pricey car insurance premiums. But undercut too much, and ineffective cover after a car accident, natural disaster, or vehicle theft risks a stressful financial quandary.
Understanding common terms and practices in the insurance sector goes a long way toward helping car owners find, secure, and maintain reliable policy protection that will meet specific needs.
Whether on the hunt for car insurance for a new vehicle or looking to overhaul your current car insurance, Yes Loans can make sure you find a stand-out policy perfect for your business or family.
Understanding car insurance categories
What is compulsory third party insurance?
Compulsory third party insurance (CTP) is mandatory in Western Australia and included in vehicle registration fees. If in a car accident, CTP covers compensation for victim injuries or death.
Be aware this type of cover addresses costs pertaining to physical injury and fatalities—not vehicular or property damage for which you are culpable. In short, you could end up facing big bills.
What is third party property insurance?
Since CTP isn’t going to pay for the damage you may have done to the other person’s vehicle (or property) this popular and relatively inexpensive insurance option covers these costs.
Keep in mind, that third property insurance doesn’t cover the repair or replacement of your own vehicle. Manageable if you have an older vehicle, but not so much if your car is a new, expensive model.
What is third party property, fire and theft insurance?
A more extensive variation on third party property insurance, will also cover your own vehicle in the case of damage from fire or theft, along with damage to the vehicle or property of others.
Especially appealing to those whose cars are not kept in a closed-in garage, or whose lifestyle sees them often park in the yard or on the street, making the car more vulnerable to theft or fire.
What is comprehensive car insurance?
As the name implies, this comprehensive type of cover costs more but is extremely reassuring. Comprehensive insurance will cover you after an accident even if it turns out you are the one at fault.
Comprehensive cover conditions vary, so check the policy carefully. Features may include cover for theft, natural disaster damage, vehicular break-ins, vandalising of your vehicle, and accidents.
Difference between market value and agreed value
The market value of your car refers to the worth of a vehicle in terms of resale at the time of the theft or accident. The agreed value refers to a set amount you have agreed to as part of the policy.
Insuring for the market value is less expensive but means you won’t be exactly sure what amount you will receive if your car needs replacing. The agreed value costs more, but equals a fixed payout.
Premiums and excess
A premium is the amount you pay annually for your car insurance. The excess refers to the amount you pay to make a claim. How much you agree to pay in excess will have an impact on your premium.
Factors such as age and road history impact excess, with younger or inexperienced drivers paying more. In some cases, excess from a no-fault accident can be recouped under certain conditions.
Choosing a car insurance policy
Vehicle make and model, how you use your car, and your lifestyle should impact the type of policy you choose. The goal is to avoid overpaying without removing policy features you consider essential.
Is reducing premium or reducing excess better for your financial situation? The value of your vehicle along with daily driving (and parking) habits are all important components of a policy decision.
At Yes Loans, we help you secure highly rated car insurance cover here in Western Australia. We understand the art of unearthing the perfect policy suited to your business and/or family needs.
Saving money on your policy
The good news is, that car insurance is a competitive field, offering many potential paths to reducing your premium and/or your excess. Be sure to consider every avenue before making a final decision.
Reducing or removing aspects of your policy can help lower costs. What is your stance on roadside assistance or care post-incident such as towing, access to car hire etc? Define your necessities.
Some policy fees can be lowered by nominating only one or two drivers. Choosing a policy based on kilometres driven is another cost-effective option for those who don’t spend much time behind the wheel.
If you park primarily in secured garages, do you need as much theft and vandalism coverage as a street parker? Note that increased car security like an alarm and immobiliser can reduce policy costs.
A no claim bonus offers savings to those with a safe driving history, meaning no recent claims or accidents. But every insurer calculates and applies a no claim bonus differently, with set conditions.
The financial aspect
A common trend nowadays is to offer a discount to those who purchase a policy online rather than by phone. Paying your annual fee upfront is another way to reduce the overall cost of your policy.
For work vehicles, bundling the company cars into one policy bundle will help secure better insurance policy terms. Likewise, bundling all the family cars together can reduce premiums for everyone.
Have you considered moving all your insurance policies to a single cost-effective provider? Bundling car insurance with other pre-existing insurance (vehicle, home, life) can lead to a better offer.
The term loyalty fee describes the hikes loyal customers may see on policies each year—alternately, a too good to be true first year fee can lead to a big second-year price hike now you’re signed on.
What to watch out for
You cover can be rendered void by certain conditions. A different driver, the fuel you use, the condition of your car (tyres, rust), drugs, alcohol, or even a broken payment schedule potentially negates coverage.
Know that modifying your car is another way to accidentally void your policy. Using a family car for work purposes—even food deliveries—may also leave you without cover in the event of a collision.
Loan protection options
At Yes Loans, we recommend considering Loan Protection Insurance which can help cover car loan repayments and protect your credit score in times of financial distress, whether from illness or accident.
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