Is comprehensive car insurance right for me?

This essentially comes down to finances for most people. While compulsory third party (CTP) insurance, which is required by law, covers you if you injure someone in a motor vehicle accident, it does not cover any property damage you might cause. If you choose to take out third party property insurance cover as well, your insurer will cover damage you cause to another person’s vehicle or property but will leave you to foot the bill for any damage caused to your own vehicle.

In choosing third party property insurance, you basically have to weigh up the financial loss to yourself if your car was a write-off and compare it to the premium being charged by your insurer. As cars get a bit older and their market value decreases, some people opt for a third party policy because it may no longer make financial sense to purchase a comprehensive policy.

One step up from third party property cover is third party fire and theft, which will cover your vehicle in the event of it being in a fire or stolen. With third party fire and theft policies, some companies will only cover the value of a vehicle up to a limited amount, such as $5,000 to $10,000, while others will cover them for the full market value or an agreed value.

The highest level of coverage is comprehensive car insurance. For most people, vehicles these days are fairly expensive, so comprehensive cover makes up the majority of car insurance policies for most insurers. If your vehicle is not financed, the decision to go for a comprehensive car insurance policy essentially comes down to the value of the vehicle, what it would cost you to repair it, and whether you could pay for the repairs yourself.

If you have finance for your car, then some finance companies will require comprehensive coverage in order for the vehicle to be guaranteed on the loan. In such cases, most insurers will note who the finance company is, and if the vehicle is written off, the money would be paid to the finance company first, with the remainder going the owner.

It is worth noting that some insurers offer discounts on comprehensive car insurance policies, particularly if they are taken out online. In some instances, it may be even cheaper to purchase a comprehensive car insurance policy than third party fire and theft.

In any case, it pays to do your homework and think about what level of cover you really need. While third party property coverage may be a bit cheaper in the short-term, comprehensive coverage can provide you with extra peace of mind and potentially save you a lot of money if you ever need it.

This advice is not based on any consideration of your objectives, financial situation or needs. To decide if it is right for you please consider these factors and carefully read the relevant product disclosure statement, available.For full details of conditions and exclusions of all our cover options, please refer to the SureCover Plus and SureCover Gold Policy Documents (Product Disclosure Statements).