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Understanding car insurance for p platers

Understanding car insurance for p platers

Once you turn 17 years old, getting a p plate on the back of your car is one of the things you’re excited about. You finally get that first taste of freedom where you can drive, without any adult supervision.

Before you hit the road and enjoy this taste of freedom, a car insurance policy is essential to ensure you’re covered in case of any damage. Plus as you’re still a newbie, there is an increased chance of getting injured or causing damage to your vehicle compared to more experienced drivers. This increased risk of accidents makes car insurance all the more essential.

When looking at car insurance for p platers, you’ll want to know what cover is offered, if you’re covered by your parent’s policy and how much it all costs. You’ll also want to understand which policy and the coverage it offers is best suited to your needs.

Choosing suitable cover

In Australia, there are three levels of cover available, each with different benefits, so it’s best to understand them before making a choice. The three levels of cover are:

  1. Compulsory third party (CTP) cover:  All Australian drivers must have CTP cover for their car to be registered or driven. It covers any compensation claims for injuries that people incur in an accident and not the damage to any vehicles. 
  2. Third-party: This covers the costs of repairing damage to another person's car or property. In third party cover, the insurer usually sets a cap on how much can be paid. Also, if you’re at fault while driving, you’ll have to pay an excess which you agreed to when buying your car insurance. You can also get third party fire and theft, which covers the above as well as damage from a fire or the theft of your vehicle.
  3. Comprehensive car insurance: Comprehensive car insurance for p platers is known to offer the highest level of protection. It will cover you whether you’re injured, your car is stolen, or you’ve damaged someone's property while driving. This is the most expensive type of cover, and you’ll have to pay an excess on any claims where you’re at fault.

CTP cover is non-negotiable, so when you look at the other options, there are few things to consider. With comprehensive car insurance will give you the most peace of mind, but third party is cheaper. As a p plater you’re likely looking for the most affordable option but consider the long-term benefits as well. For instance, if you get into an accident and only have third party insurance, you may have to pay more out of pocket. Whereas comprehensive cover may be the most expensive in terms of ongoing premiums but save you money in the long run.

Investing in comprehensive car insurance

Comprehensive car insurance covers you for damage to your vehicle plus the other driver's vehicles or property. You’ll also have coverage for any injuries, theft, vandalism, fire, and weather damage but this will depend on your specific policy so check the details.

With comprehensive cover, you choose whether your car is valued at market value or the agreed value. Value is an important part of calculating car insurance as it’s the amount you’ll receive to replace your vehicle if it’s stolen or written off.

  • Agreed value: This value is a fixed amount decided by you and your insurer. Once you decide this, you can't update it again until you renew your policy.
  • Market value: The market value is the value of your car at the time of accident/ theft/ similar situation. Car value depreciates over time, if you opt for the market value you’ll likely receive less for your car than you paid for it.

Understanding premium and excess

Once you decide on investing in car insurance, you’ll have to pay a yearly amount to maintain the cover, which is called a premium. This amount depends on various factors such as level of cover, your gender, age, location, where you park, your car, and your claims history.

You can compare premiums from multiple insurers and for different levels of cover online before committing to find the best deal.

Unlike a premium, the excess is an amount you have to pay when you make a claim. The excess amount will be the same no matter the cost of your claim as you choose this when you sign up for your insurance. Changing the amount of excess can help you save on the cost of your premium. 

An excess works like this, if you make a claim where the total damage is $2000, you will have to pay $500 (the predefined excess), and the rest, $1500, will be paid by your insurer. Excess is paid when you claim for an accident where you’re at fault. If the amount to repair the car is less than your excess you may consider paying this out of pocket rather than making a claim.

The amount for premium and excess is generally higher for p platers as they have less experience and are considered a higher risk to insurers.

Will a policy always help you stay covered?

A car insurance policy will always help you stay covered unless you’re found to be:

  • Exceeding the speed limit
  • Using your mobile while driving
  • Driving around with passengers under 21 years old at restricted times
  • Not disclosing all information about your car at the time of getting cover
  • Supervising a learner
  • Driving under the influence of alcohol

Essentially your car insurance will not cover you if you’re in any way breaking the law or any restrictions that may be placed on you as a driver.

How much does comprehensive car insurance cost

The cost of car insurance for p platers depends on many factors including your insurer, inclusions and exclusions, excess, and more. On average, an Aussie pays around $1,131 a year for comprehensive car insurance.

You can research the costs of comprehensive car insurance for p platers from different insurers by comparing them online. Make sure to check not just the premium costs but the excess and what the policy covers.

How to save money while buying car insurance

If you’re looking for ways to cut costs when getting car insurance, here are some things you could consider:

  • Limiting your mileage or the amount you drive
  • Enhancing security on your car with devices such as immobilisers, wheel locks and tracking systems
  • Parking your car in a secure location
  • Choosing an insurer which offers discounts or bonuses, often for good driving or other factors
  • Reviewing your premium and excess amount with your insurer

Driving safely, following all the rules, and choosing a policy that best suits your requirements will ensure your driving life is simpler and safer.

Getting insured based on the model of your car

Getting insured is not going to be easy on your pocket. But, you might be able to save quite a bit by choosing an appropriate car. This is because the more expensive your car, the higher your car insurance premium is going to be.

As you’re a beginner or inexperienced driver, choosing a small, more commonly available model will allow you access more reasonable insurance premium costs. There may also be restrictions on the type of car you can own based on you being a p plater, check with the relevant state authority for details.

Getting included in your parents' policy

If you’re planning to drive your family car rather than buy your own, then your best bet is to have your name added to your parents' policy. This option is only available if the policyholder, your mum or dad, owns the car because the name on the registration must match the name on the policy.

All you need to do is contact the insurer and get listed as an additional driver on their policy. By making this change, your parents might have to pay a higher premium due to being under 25 and an inexperienced driver. You could always offer to pay part of the premium to help cover this additional cost.

On the other hand, if you’re planning to purchase and drive your own car, you can compare a range of options online to find the best option for you.

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