Car Insurance Guide

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Car Insurance Guide

When it comes to choosing the right car insurance for you there are several providers available, which can make your decision more difficult. As a result RateCity has developed a Car Insurance How To Guide, which will direct you through the car insurance maze to help you better understand your comprehensive car insurance policy and find a great value premium.

What to consider when comparing Car Insurance quotes

1. Why comprehensive car insurance?

Comprehensive car insurance is the best level of car insurance cover available. In the event of an accident you will be covered, whether it is for repairs or vehicle replacement, regardless of who is at fault. Comprehensive car insurance is not compulsory however, like most types of insurance when you need it you are extremely grateful that you have it.

2. Features of car insurance policies

Below is a list of some of the common features that may appear on your car insurance policy and what they mean.

  • Market or agreed value The market value, or the value of a vehicle if sold on the open market, is the amount you would receive from your insurance provider if your vehicle was written-off. An agreed value is the amount that both the car insurance company and you agree upon to which the vehicle is worth. This is a fixed amount and is not affected by the market.
  • No claim bonus (NCB) This relates to your insurance history and how many consecutive years you have comprehensive car insurance without making a claim. The lower the rating the more claim-free years and the higher percentage discount off your premium you will receive. The level of NCB is as follows:
Number of claim free years Level of rating
0 yearsRating 6
1 yearRating 5
2 yearsRating 4
3 yearsRating 3
4 yearsRating 2
5 yearsRating 1
  • Lifetime NCB protection or NCB protection Normally when you make a claim, your level of NCB is affected, however if you choose to include a NCB protection on your policy as an extra option your NCB will be protected when you make a claim. Some insurance companies have a limit on how many claims you can make in a certain amount of time without it being affected, so make sure you are aware of this before you sign up.
  • Extras options Most insurance companies offer additional options that you can add onto your policy at an extra cost, including:
  • Hire car: If you car is stolen or damaged as a result of an accident, you will have access to a hire car for a certain amount of time as stipulated in your policy.
  • Windscreen protection: This means that if your windscreen is damaged or broken you will not have to pay the excess in order to have it repaired.
  • *Nominated or preferred drivers only: *If you are the only person who drives your car or if only you and your partner only drive the car, you may be able to choose to select you/both as the nominated or preferred drivers only, which could reduce your premium. This means that if someone else drives your car and has an accident they may not be covered and you will be out of pocket with an additional excess.
  • Excess: The excess is the amount that you have to pay when you make a claim, on top of your premium. Most policies allow you to select the amount of excess you will have to pay. However reducing the excess amount can increase your premium, and a higher excess will lower your premium.

3. How to buy a policy

If you are in the market for comprehensive car insurance, it pays to compare car insurance online. By shopping around online you will be able to compare the features available by each insurance provider and find one that offers a low premium and meets your needs. Also some insurance companies offer a discount if you purchase your policy online which can further reduce your premium and save you more.

4. Checklist – Do you have everything you need to apply?

So you have shopped around and found a car insurance company that you are happy with, one that offers the right coverage at a great price. Before you apply make sure that you have the following information ready, to make the application process quick and easy:

  • Details of the people who will be driving the car – make sure you list all possible drivers
  • Your contact and address details
  • Car details – You will need to know the year, make and model. Some companies also ask for your registration number
  • Car features – If you have any extra options fitted to the car
  • Whether your car is fitted with an immobilizer, alarm or both
  • How much your car is currently worth – you will need to determine if you want to insure it for the market or agreed value.
  • Your driving history – if you have made any claims in the past five or so years you will need details of these
  • If you have a no claims bonus, what level is it? How long has it been since you have made a claim?
  • Where is the vehicle kept when you are not using it and overnight?
  • Do you use your vehicle for personal or business use or both?
  • How many kilometres would you drive annually on average? How many kilometres is currently on the clock?
  • Is the car financed, leased or how did you purchase the car?

Finally, remember to read the product disclosure statement (PDS) before signing any documentation so you are aware of what is included in your policy and what is not.

5. Star Ratings

CANSTAR star ratings are a consumer-friendly benchmark that help you compare financial products based on their rates and features. We evaluate literally thousands of products from hundreds of finance institutions. Products offering superior value are awarded five stars.

Only the top 5% to 10% of products scored using the CANSTAR star ratings methodology are awarded the prestigious five star status. As a consumer, this is your guarantee of a high-performance product.

For more information on Star Ratings, check out our Star Ratings page

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