Automotive

The Five Types of Insurance Policies Required to Avoid Extra Costs in the Auto Industry

When purchasing a car, many of you focus on aspects concerning its security and maintenance. However, the story does not end at investing a considerable amount in buying a car. Obtaining insurance is crucial for protecting your assets. Moreover, failing to insure your vehicle might lead to incurring a high amount of expenses in case of a breakdown, accident or even if someone steals your car. Every Australian might have experienced such a case in their daily life. Therefore, to avoid extra expenses, you should get your vehicle insured.

Nevertheless, this does not imply that you choose any insurance policy. Thus, it is vital that you thoroughly search the insurance market before deciding on the most appropriate car insurance in Australia. Most Australian insurers offer five types of insurance covers that can provide complete protection to your car. For example, third party insurance, third party theft and fire insurance, comprehensive car insurance, third party property only and compulsory third party insurance.

Third-party car insurance provides primary benefits for protecting your car after an accident. Third-party insurance is mainly required when you are searching for minimum coverage. It is only beneficial when you are looking forward to ensuring that the car is street-legal. It can also be considered when you know very well your vehicle will hardly experience any severe risks. For example, it can be used when your car has been stored long and is often not used. This type of coverage will cater for expenses resulting from an accident due to your rash driving, negligence or fault. Thus, the policy will cater to the costs resulting from damage to another individual, their property, and their vehicle.

Nevertheless, this cover does not cater to the medical expenses due to your injuries and costs caused by damage to your car. In other words, the third party insurance will only cover the third person in the accident. Thus it will not protect you.

The third-party theft and fire insurance offer protection to the other individual involved in the accident while still covering your car in case of damage caused by stealing or fire. Thus, while protecting the expenses resulting from damage to the third party, it covers all the expenses arising due to injury or loss of your car resulting from most common occurrences, including accidental fire and theft.

Additionally, comprehensive car insurance ensures the complete protection of your car. It covers all the expenses resulting from damage or loss of your car or some of its parts. Moreover, it also covers costs arising from the third party besides covering emergency medical expenses. The insurance cover offers you and your assets the security and safety of any damage when an accident occurs. For example, after obtaining the car insurance quote, this type of policy will protect you from all collision and financial damage resulting from an accident. It gives coverage to your damages as well as those of the third party.

 The third-party property only type of insurance policy offers protection to the damages caused by your car to other people’s property. It caters for your liabilities of paying compensation for any injuries made to other people’s property by your vehicle. Moreover, it is an optional insurance cover in addition to being among liability insurance types. The abovementioned implies that if the accident caused by your car causes damage to another person’s property, the whole loss is catered by the third insurance policy. Moreover, you are not covered in case of any loss to your property or any physical damage. Notably if, for instance, if the loss happens outside the specified location, then it is not taken care of by this policy. Also, if the vehicle was being driven by another person who is not the accident’s owner, the policy will not cover the situation. Also, it does not include losses or damages caused by invasion, war or this kind of operation.

Lastly, the compulsory third party offers compensation for individuals injured or even killed if your car causes an accident. It is mandatory to obtain in all Australian states. You can hardly register your car without getting a policy; therefore, you should have your compulsory third-party insurance policy in place during your vehicle registration in Australia. However, irrespective of the state, this type of policy will not cater for damages made by you to your car or for the other parties’ car or theft or damage caused to property. Since it is compulsory, compensation does not depend on the individual who led to the damage. Therefore, payment may fail to be equally distributed to the entitled parties without this type of insurance policy. Thus, in case of an accident, you should follow the correct claiming procedure for the settlement.

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