Car insurance Frequently Asked Questions (FAQs)

 

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Frequently Asked Questions (FAQs)

A car is one of the most valuable assets that you’ll buy, and the cost of having to repair it in the event of an accident or replace it if it’s been stolen can be expensive. Having the right level of insurance can help cover you for this cost, as well as cover you for costs liable to you, if you cause an accident with another vehicle.

When arranging your quote, you may need to notify your insurer of all parties who’ll be driving the vehicle. In some instances, you’ll need to have details such as their driving and insurance history, personal details, and any driving claims or fines on hand.

If you already have existing car insurance and would like to add another person to your policy, simply contact your insurer to let them know. 

This will depend on the policy that you select. You should read the Product Disclosure Statement of the policy that you’re interested in to find out more.

Market value is what the open market believes your vehicle to be worth at the time of its loss or damage. The value will depend on factors such as the age of the vehicle, the make and model, how many kilometres it’s travelled, and its condition.

When you’re applying for your car insurance policy, you’ll need to nominate a date for your policy to start, and as long as your application has been accepted by the insurer and you’ve paid your premiums, your policy will start on that date.

To ensure that your car is covered, a policy should be commenced before it’s in your possession (i.e. just before you pick it up from the dealership or whomever you bought it from). If you’re getting your car financed, then your lender will usually ask that you insure your car before you can drive it. Even if you don’t plan to drive it straight away, it can still be a good idea to get car insurance because there’s the risk that it could get stolen or damaged, even while parked.

It depends on the type of car insurance that you buy. A Third-Party Property policy only covers damage and legal costs caused by your car to another car or property, but not damage costs to your car. A Third-Party Fire and Theft Property policy covers the same, but also covers your own car for claims against fire and theft. A Comprehensive car insurance policy will generally cover you for accidents and resulting damage to both your car and anyone else’s if you’re at fault, fire and theft, but it won’t cover you for breakdowns. Make sure you read the Product Disclosure Statement of the policy you want to buy for cover details.

Generally, insurance won’t cover loss, damage or liability for:

  • Drivers that were under the influence of alcohol or drugs or anyone who refuses to be tested for alcohol or drugs
  • Drivers that have been excluded from/not listed on your policy, or excluded because of age
  • Drivers without a valid driver’s licence or permit
  • Carrying passengers or goods in exchange for payment (e.g. Uber) – this depends on the insurer as there are some that will cover you for this
  • Illegal activities
  • Vehicles that aren’t roadworthy

You’re also generally not covered for loss, damage or liability from:

  • General wear and tear, including tyre damage
  • Deliberate acts

The above are just some general exclusions and are by no means the full list of what’s not covered. Depending on the type of insurance you take out, it’s important that you’re aware of everything your policy doesn’t cover. Make sure you read the policy’s Product Disclosure Statement first for all the details.


 

If you have an accident, you should first of all, ensure your car is secure, then report the accident to the police. You should then call your insurer and report the accident. If you can’t contact your insurer, you should do what you can to prevent further loss or damage to your car, and this may include having it towed. You should then contact your insurer as soon as possible. 

If your accident involves another driver and car, then you should also be exchanging contact and insurance details with the other driver. 

A no-claim discount or bonus is a discount that’s offered on your comprehensive car insurance premium based on your claims history and length of time driving (experience). It’s basically a reward for good driving. You generally start at Rating 6 (the lowest discount) and it goes down by 1 each year you don’t claim, until you reach Rating 1 (the maximum discount) after approximately 5 years of no claims. This discount is calculated on both your years of driving experience, your claims record, and sometimes other criteria from your insurer. It can be a good idea to check what type of discount is available on a policy, as some insurers may also take into account your no-claim bonus from another insurer if you’re switching to them. Keep in mind that making a claim even if you’re not at fault can impact your no-claim status but this depends on your insurer.  

It depends on your policy. Some insurers will want you to list all regular drivers of your car for them to be covered by your policy. For unlisted drivers, some insurers are happy to cover them, but you may need to pay an ‘unlisted driver’ excess, and there may be an additional age excess to pay if the driver is under a certain age, such as 25 years old. Other insurers may not cover unlisted drivers at all. You should check the Product Disclosure Statement (PDS) of the policy you want to buy for full details.

There are a number of different types of car insurance available.

  • Comprehensive Insurance: This level of cover is the highest level and most complete cover and covers you for theft, fire, or damage to your vehicle (the damage was caused by you or somebody else) and if you are at-fault any other vehicle or other persons property that is involved in your accident.
  • Third Party Fire and Theft: This level of cover will insure you against damage done to your car by fire, theft, and for any legal liability that you may incur in the event you damage a third party's vehicle or other property.
  • Third Party Property: This is the lowest level of car insurance cover available and will only cover you for the damage that you may cause to another person's property (this includes their car and any other property).

An agreed value is an amount that you and the insurer agree to insure your vehicle. This amount is generally valid for the term of the car insurance policy until next renewal.

The cost of car insurance is calculated on a number of factors, and may include the age, make and model of the vehicle, condition of the vehicle, where the vehicle is parked during the day and at night, age and gender of the driver, the driver’s history of accidents and claims, and also the level of cover required.

Every insurer treats listed and unlisted drivers differently. You should contact the insurer of the policy you’re interested in to make sure you understand exactly what circumstances you’ll be covered under.

Most policies will include the learner driver as long as they hold a valid learner license/permit and they’re being taught by the nominated driver of the vehicle, but there’s a chance you may need to pay a learner driver excess. You should check the Product Disclosure Statement of the policy you want to buy to check that this is valid for that particular policy.

An excess is an amount agreed between you and the insurer that you’ll pay in the event of a claim. For example, if you agree on an excess of $600 with your insurer, and your claim is for $2,000, you’ll need to pay the first $600, and your insurer will pay the remaining $1,400.  Depending on the insurer, you may be able to choose a higher excess so you can lower your premium.

Part of assessing the risk to insure your car depends on where you live (and therefore where your car is parked when not being driven). If you move house, you’ll need to contact the insurer and provide them with your new details. Otherwise, you may invalidate your policy. You may have to pay an additional amount on your premium if your new address is in a higher risk area, or you may even be entitled to a partial refund if your new address is in a lower risk area than your previous address.

Yes, you can cancel your policy at any time.  You’ll need to contact the insurer directly to do this and they’ll advise you of the steps that you need to take to cancel your policy. Some insurers may charge a fee for cancellation in certain circumstances.

Firstly, you must contact the police and report the loss to them. They should then provide you with a reference number. You should then contact your insurer with these details and they’ll provide you with a procedure to follow.

When you buy a policy, you’re entitled to a cooling off period (typically around 14 or 21 days), and as long as you cancel within this time and you haven’t made a claim, you’ll get a full refund of the premium that you paid. If you cancel the policy after this period, you may be eligible for a refund if you’ve chosen the annual payment option and you haven’t made a claim. This amount will be equivalent to the unused portion of your payment.


Important note:
The answers above are to be used as a reference guide only and don't substitute or replace your insurance contract, the Product Disclosure Statement (PDS) or Certificate of Insurance.

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