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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Learn more about car insurance

Does car insurance cover contents?

Thousands of vehicles are stolen each year, but insurance can protect you from financial loss.

A common question you may have is what does my car insurance cover? This depends on the type of insurance and there are four basic types of car insurance, and each offers different cover.

 

Types of car insurance

Compulsory third-party (CTP) insurance indemnifies you against liabilities arising due to personal injuries to another party. A third-party fire and theft insurance policy covers loss to your car or third-party property in an accident. It also covers expenses if your vehicle is damaged in a fire or stolen. Third-party property insurance covers any liability resulting from damage to third-party property but any damage to your property is not covered under this policy.  Comprehensive policy covers most costs arising in case of an accident to either your car or third-party property.

 

Does car insurance cover stolen contents?

Does car insurance cover contents lost in case of a theft? Generally, any valuables stolen from the vehicle, such as your phone, are not covered under car insurance. However, some insurers offer vehicle contents insurance that does cover the loss of valuables from your car.

Consider reading your policy’s product disclosure statement (PDS) to find out if it covers contents, or contact your insurer directly.

Remember, there are several ways in which you can prevent theft of both your car and contents. Being a little more cautious can make a huge difference.

How to choose car insurance?

With so many types of car insurance out there, it can be a challenge to choose the right one for you. Factors to consider when choosing car insurance include the cost, the inclusions, and the benefits of each, which may vary from provider to provider. When choosing a car insurance company, spend some time comparing what is, and what isn’t, covered by the policies.

Compulsory third party (CTP) insurance is part of your car registration cost. However, CTP does not protect you against damage to your car if it’s written off after an accident or if it gets stolen. Moreover, you might have to pay for damages to someone else's property in case of an accident.

Other covers you may wish to consider are third party property insurance, third party property, fire and theft insurance, and comprehensive insurance. While you might want to get additional insurance, not everyone requires the highest cover, and it depends entirely on several factors, such as the make and age of the car or the area where you live.

You can compare car insurance providers to get a policy that suits your needs.

Does insurance cover a stolen car if keys were in the car?

A car insurance policy that covers the theft of your car, such as third party fire and theft insurance, usually covers a stolen car, even if the keys were in the car’s ignition.

However, your insurer may deny the claim if you live in an area where there have been several car robberies reported recently. They will see you leaving the keys in the car as a case of negligence. In such cases, your insurance provider may even expect you to have installed anti-theft security measures in your car. 

You may need to confirm whether or not you left your keys in your car, and if they had been stolen or misplaced, before filing your car insurance claim. The loss or theft of your car keys may be covered by a comprehensive car insurance policy, but usually as an optional item.

If you can confirm that your car keys were stolen, mention this in your claim as this will help establish that your car was not stolen as a result of your negligence.

Can you insure your car for 6 months?

Most Australian insurers won’t offer you a 6-month car insurance policy, so you may need to buy a policy that covers your car for damages and cancel it after six months. You will need to purchase comprehensive car insurance to protect your car from accidental damage, theft, vandalism, or natural disasters.. 

Consider checking whether your 6-month comprehensive car insurance will cost more if you pay monthly or six-monthly premiums instead of a one-time annual premium. Another question to ask the insurer is whether you’ll need to pay administration or cancellation fees when you cancel the policy.

Alternatively, you can look for a suitable ‘pay as you drive’ car insurance policy, which usually offers you the coverage of a comprehensive car insurance policy but only requires you to pay for the distance driven. Such a policy may not be the ideal 6-month car insurance plan as it is based on how much you drive rather than for how long. If you need to drive a lot, you may end up paying more than you’d pay for regular car insurance. 

Can you claim insurance for car dents?

Car insurance has been designed to protect you from some of the costs of repairing damage to your car. However, is it worth claiming car insurance for a dent?

The main factor to take into account is the excess that you will need to pay at the time of making the insurance claim for the car door dent, and comparing it with the repair cost of the dent.

For instance, if someone collided into your car with a shopping cart and the cost of repairing the dent is lesser than your excess, you would be better off not making the claim. However, if your car’s panels are dented by intense hail, in all likelihood the cost of getting the dents taken care of will be much higher than your excess. Here making a car dent insurance claim would make sense.

Please note that if you’re making a car dent insurance claim for damages that have accumulated over a long time, you will be required to pay an excess for each separate incident that dented your car.

 

Does car insurance cover driving while intoxicated?

Will car insurance pay if drunk driving causes an accident? Driving under the influence of drugs or alcohol is illegal, however, some insurers may cover the liabilities.

Your driving history and experience are important factors that affect the car insurance premium. If you have had violations for drinking under the influence, insurers may perceive you as high-risk. They will then be more likely to charge you a higher car insurance premium.

But does car insurance cover drunk driving accident liabilities? Many factors are involved in answering this, here’s what you should know.

Amount of cover

Although driving while intoxicated is illegal, if you’re involved in an accident, your insurance may cover damages within the limits of the policy. While expenses should be covered under your car insurance for drunk driving accidents, you may face other penalties, like cancellation or non-renewal of your policy.

Premiums

Additionally, the premium on car insurance for drunk drivers may increase by as much as 79% if you’re convicted. Some insurers, however, won’t cover damages if you’re driving whilst intoxicated and you don’t comply with the conditions laid out in the Product Disclosure Statement (PDS).

Check "does car insurance cover you if you are drunk" in the terms and conditions of your policy if you have a history of such violations.

Can you have a car without insurance?

Can you have a car without insurance? The simple answer is ‘no’ and driving without insurance is illegal. Every vehicle in Australia is required to have at minimum a Compulsory Third Party (CTP) insurance policy to be registered to drive.

Having car insurance beyond CTP is entirely up to you as the driver and owner of the vehicle. You may want to keep in mind, however, that being in a car accident can be traumatic, especially if it results in vehicular damage or injuries.

Dealing with any expenses that arise in an accident when you are at fault can cause additional stress. This is especially true if you don’t have insurance coverage that will assist in paying for these damages.

Compulsory third-party insurance

In multiple states and territories, the cost of CTP insurance is included in the registration expenses. For the states or territories where it’s not included, CTP insurance needs to be confirmed before you’re able to pay for registration. CTP insurance protects you against claims arising due to accidental injuries or death when you are involved in an at-fault car accident.

Why is CTP inadequate?

CTP does not cover damage to third-party property or any of the vehicles involved in the accident. The driver who is responsible for the accident is liable to cover all the expenses. Therefore, if you only have CTP insurance, you’ll have to pay for other expenses, such as car and property repairs, towing, and potentially car rental. If you want a policy that covers these costs, you need a comprehensive or third-party property damage insurance policy.

If you’re asking, is it illegal to have a car without insurance, the answer isn’t simple. Specifically, it is illegal to not have a CTP policy at the very least, but any insurance beyond that is a choice. If you’re caught driving an unregistered vehicle --  if you don’t have a CTP insurance policy, that is -- you may receive infringement notices that include fines and a loss of demerit points.

Are stolen car keys covered by insurance?

Having your car key stolen is not just frustrating, but it can also turn out to be quite a costly affair. Modern electronic keys can be much more expensive to replace than traditional ones, and losing one can make a sizeable dent in your pocket. But does insurance cover stolen car keys?

A few comprehensive car insurance and third party fire and theft policies do cover lost car keys as a standard, while others offer it to their customers as an extra. However, there are some that don’t entertain stolen car keys insurance claims, so you must check with your insurance policy provider and read the Product Disclosure Statement carefully before purchasing the policy.

It is important to note that you will need to prove to your car insurance provider that the keys have actually been stolen and not merely misplaced, as most policies will refuse to provide cover in the case of lost keys. Car insurance policies that cover stolen keys typically cover the cost of replacing the keys, recoding your car locks and locksmith charges.

 

Can you get same-day car insurance?

While you can buy car insurance the same day you purchase a vehicle, coverage may not take effect immediately, and you need to make sure you aren’t driving around without an active car insurance policy. This can happen if the insurer insists that your vehicle needs to be inspected before they approve the policy. When purchasing a new or used car, you will need compulsory third-party (CTP) coverage before you can drive it. Usually, CTP coverage is included with your car registration. However, in some states, you can choose to buy it from an insurer licensed by the state or territory to offer CTP coverage. Consider checking whether you should buy this policy before registering the car.

Given that you can buy a car insurance policy online, getting the policy may only take an hour or two if you’ve done your research. You may want to ask the insurer about any waiting periods they may place on coverage. For instance, if you’re buying third-party fire and theft insurance just before the bushfire season, the insurer may not allow you to file a fire damage insurance claim anytime soon. Many insurance providers will let you decide the date on which your coverage becomes active. This may be useful if you’re about to buy a car and want to match the date the insurance coverage becomes active with the day you plan to register your car.

Does my car insurance cover water damage?

There are many types of natural disasters that affect Australia and if your car is in the wrong place at the wrong time, it could get damaged. The right insurance policy should protect you from loss if your car needs to be repaired. Comprehensive car insurance packages cover certain types of water damage. However, it depends on what caused the damage.

Under certain policies, your car may be covered for water damage caused by flooding, heavy rain, and hailstorms. Your car’s exterior, interior, and engine are typically covered against these natural disasters under comprehensive policies.

However, comprehensive cover does not usually pay for any internal water damage caused by a maintenance issue, such as a window or sunroof left open during a rainstorm or an ignored slow leak. Leaks that are a result of heavy rain might be covered given it’s possible that your car has some imperfections like bad sealing on the windows, doors, or sunroof.

To ensure that you can claim water damage car insurance, follow these car water damage insurance claim tips: 

  • Get slow leaks repaired as soon as they emerge;
  • Ensure that windows or the sunroof are never left open when the car is not in use.

Can I drive a new car without insurance?

It is illegal to drive a car in Australia without insurance. Most states require that you get your insurance in place before you drive the car off the dealership’s plot. So, the answer to whether driving a new car without insurance is no, it is not allowed.

The only time you can possibly legally drive an uninsured car is when you have to get the vehicle registered. You should drive straight to an inspection station or your state's vehicle registry. You must also make sure that you take the most direct or convenient route possible.

It is important to note that your compulsory third party insurance (CTP or green slip) isn’t valid until your car is registered.

Driving an unregistered or uninsured vehicle can have severe legal repercussions. If you are involved in an accident, and are driving an unregistered and uninsured vehicle, you will be personally liable to pay compensation to anyone hurt, as well as for damages. If you are caught driving a vehicle without insurance, you may be fined or even have your vehicle seized.

 

Does the colour of your car affect your insurance rate?

You may be surprised to learn that you may want to consider choosing the colour of your car based on your insurance premium, and not your favourite colour. Research from Monash University back in 2007 has shown that the colour of the car could affect the likelihood of a crash and hence some colours could attract higher car insurance premiums than others.

Statistically, silver and grey cars have demonstrated a higher crash risk as compared to say, white cars. This could be because these colours have lower visibility on roads as compared to other colours. The colour orange is deemed a safer bet than white, as are shades of cream, yellow and mauve, although the difference in their premium pricing is not as significant.

Additionally, some colours and paints, especially metallic or pearl shades, can be expensive and cost more to repair or replace. These colours could also affect the value of your car and may raise its cost to a certain degree.

Besides the likelihood of being involved in an accident and the cost of repainting, certain colours also pose a greater chance of being stolen. On average, a green car costs less to insure than a black one since data has shown that black cars are more likely to be stolen than green ones.