Car Insurance - Explainer

In the interests of supporting our customers with all aspects of their motor vehicle purchase, Jade Finance provides general advice on car insurance. Insurance and lending are key sectors in the Financial Services industry and while we’re not insurance brokers nor are we aligned with any insurance company, our consultants are extremely knowledgeable on insurance matters.

There are 2 main car insurance policies that all car owners need to consider:-

  • Compulsory Third Party Insurance (CTP)
  • Comprehensive Car Insurance

Compulsory Third Party Insurance (CTP)

  • In some states, CTP is referred to as a ‘green slip’ as the policy used to be issued on green-coloured paper. Now they are primarily issued electronically or on white paper.
  • As the name implies, CTO is a compulsory policy that all registered vehicles in all states of Australia are required to be covered under.
  • You will not be able to register your car unless you have a CTP policy.
  • CTP covers the driver of the vehicle (in this example, yourself or eligible drivers of your car) for liability for death or injury to other persons (not the driver) sustained in an accident which is the fault of your vehicle.
  • CTP covers passengers, other drivers, pedestrians, bystanders, cyclists etc who are injured in an accident which is deemed the fault of the driver of your vehicle.
  • CTP does not cover yourself as the driver at fault or damage to your car.
  • CTP will not cover damage caused by your vehicle to other people’s property or vehicles.
  • CTP purely covers injury to people.
  • In many states of Australia your CTP will already be included in your car registration so you do not have to purchase a separate policy.
  • In NSW, ACT and Qld, car owners are required to purchase their CTP policy.
  • All major insurers and many smaller companies offer CTP policies. It is a very competitive market and you can save money by shopping around for the best policy.
  • Policies cover the same elements, but insurers price each policy according to their own company guidelines. So prices will vary.
  • Quotes on CTP for your vehicle can easily be obtained online at many insurance company websites, by phoning or by using a comparative website.
  • To do the deep dive, consider checking reviews of insurers and CTP policies and reviewing comments on consumer websites.

Your Jade consultant can provide further information, insurer recommendations and in some cases, we can include the cost of your CTP policy in your car loan. Call 1300 000 008.

Comprehensive Car Insurance

  • A comprehensive car insurance can cover you and your car against theft and damage and cover other people’s property for any damage caused by your vehicle in an accident.
  • Comprehensive insurance is not a compulsory requirement under state regulations but many lenders will require their loan customers to take out a policy. Remember, if you have a car loan and you do not have comprehensive car insurance, if your car is written off or stolen you will be required to finalise your car loan as there is no longer security against the loan.
  • Many insurance companies issue these policies, the market is huge and highly competitive so it can worthwhile shopping around for the best policy for your requirements.
  • The cheapest policy is not always the best policy for you. The inclusions, terms and conditions can vary significantly across the policies.
  • You need to read and understand the fine print and be confident that you are fully aware of what will be covered and won’t be covered in your policy.
  • A few suggested items to consider: storm damage compared with flood or natural disaster damage; how many windscreen replacements you are covered for each year; adding accessories and modifications to your vehicle may add to the premium or void your policy; can you choose your own repairer; what drivers are covered under the policy, especially learners and under 25s.
  • Some insurers price policies based purely on the make, model and age of the vehicle and where it is usually garaged. Others do the deep dive and take into account how you use your vehicle.
  • Policies are usually priced on agreed market value or a fixed value – you can negotiate these aspects with your insurer.
  • Most policies include a ‘no claim bonus’ which is a discount on the premium if you have not made a claim in a certain number of years.
  • Many insurers offer a pay-by-the-month, by the quarter or half-year option.
  • You will usually select the items you do and don’t want included in your specific policy. Eg do you want a rental car provided if your car is in for repair? Sounds convenient but would this be essential to your requirements when compared with additional cost on the premium.
  • Policies are annual and must be renewed each year. Your insurer will usually send you a renewal notification with details of the premium for the coming year and a new policy document.

Your Jade consultant can provide further information, insurer recommendations and in some cases, we can include the cost of your comprehensive car insurance policy in your car loan. Call 1300 000 008.

For more information on car insurance, speak with a Jade Finance Consultant. Call 1300 000 008

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