Motor Vehicle Insurance
Motor Vehicle Insurance
Breathe easy when you have the right Motor Vehicle Insurance in place
A car or a motorbike can be at least the second most expensive thing that you will own. It makes sense to protect that asset, although it is usually one that quickly loses value. However, it is not an asset that can easily and quickly be repaired or replaced unless it is insured. On top of this, you may be a fantastic driver but you could be the one hit by another driver who makes an unfortunate mistake. Not everyone has the same level of experience or care on the road. In many cases, it doesn't matter how good a driver you are, as your chances of being in an accident is actually very high.
"... 1 in every 9 cars are reported stolen each year ..."
According to the Australian Bureau of Statistics, there are over 600,000 road accidents in Australia each year, costing the economy an estimated $27 billion annually. But it's not just car crashes that you need to worry about, with statistics showing that 1 in every 9 cars are reported stolen each year. Also, it could be that you make the mistake and run into the back of an expensive car. 100% at fault, you would be liable to repay the damage to that vehicle owner or their Insurer, so you need Third Party Liability cover too. Therefore, if you own a car, you need at least some form of insurance. Motor Vehicle Insurance is a must. In the following we discuss the different aspects of Motor Insurance that may assist in more understanding of what makes it tick.
Types of Motor Insurance
- Compulsory Third Party Insurance - is usually included with your vehicle registration fees, depending on which state you live in. It covers death or injury to those involved in an accident - apart from the driver.
- Third Party Property Damage - Covers the cost of damage caused to other people's property and associated legal costs but not damage to your vehicle.
- Fire and Theft - often added to a Third Party Property Damage policy, cover for damage caused to your vehicle by a fire or theft to your own car.
- Comprehensive - not only includes Third Party Property Damage and Fire and Theft, but also the repair or replacement of your vehicle for events including collision, malicious damage and weather-related damage, such as hail or flooding.
Factors that affect how the premium is calculated
- Age - particularly if under 25, these drivers statistically have many more accidents
- Gender - men do have more accidents and they are generally more severe too
- Driving Record - never had an accident or traffic offence? Then no loadings on the premium
- Type of Car - Cost of repairing and their replacement parts will play a big factor in the size of a premium. So too these days, cars with great safety features.
- Location - inner city locations have more theft and malicious damage incidents. Big cities have more traffic on the roads and more stops means more likelihood of an accident. Generally those living in country areas will pay less
Additional Benefits available
As with most types of insurance products, insurers will offer a range of different extras that they may automatically include or you may wish to include as part of the cover. Some of these will involve an additional cost. These include:
- Protection of your no-claim bonus
- A rental vehicle following a theft
- A rental car following an accident
- Brand new replacement of car if less than two years old
- Excess free - windscreen and glass damage cover
- Theft of Personal Effects
- Funeral or Death benefit
- Excess free if accident not your fault and other party's details provided
- Finance Company payout if value falls below payout figure
- Roadside assistance
- Agreed value - A perfect motor policy would say, "the better of Agreed value or market value, whichever is the higher" but often they say the lesser.
Ways to reduce the premium
Insurance companies generally provide a lot of options for people to reduce the premiums they pay. You can actively do a lot of things to help keep the costs down. These include:
- Parking your car safely and securely (either off street or in a lock-up garage) can reduce the risk of theft, vandalism, and flood or storm damage claims.
- Maintaining a good driving record reduces the risk of you making a claim - many insurers offer sizeable discounts for drivers with good driving records.
- Safety and security devices like alarms or immobilisers to reduce the risk of theft and damage.
- Driving less often. It sounds silly but some insurers will offer lower premiums for drivers who stay under a certain amount of kilometres for the year.
- Limiting the number of drivers you nominate on your policy, especially if they are under 25.
- Choosing a higher excess - the higher the excess, the lower the premium.
- Choosing to insure for market value instead of nominated value.
- Bundling your car insurance with other types of insurance, such as home and contents, life or travel insurance can sometimes earn a discount if with the same insurer.
What to do if you have an accident
We have motor vehicle insurance in place, but we hope we never have to use it. But with so many accidents happening every day, there's a possibility you will need to make a claim at some stage. Fortunately, most accidents only damage the vehicles rather than the occupants. But what do you do if you have an accident?
- Firstly, never drive away from the scene of the accident until you've completed the following steps.
- Don't panic! As hard as it can be, try to stay calm.
- Move the car, if possible, to a safe position
- Try and prevent any further accidents by keeping your hazard lights on.
- Switch off the ignition
- Next check to see if anyone is injured. If so, call 000 to get medical assistance immediately.
- Report the accident to police if someone is injured (this includes you) or if there is damage to property whose owner is not in attendance. Your insurance company will want to see a police report if possible.
- Make sure you give your name, address, registration number, contact details and insurance information to the other people involved in the accident. Make sure to get the same details from the other driver
- It can be very helpful to get contact details from witnesses if there are any.
- When you get a chance, use your camera or phone to take photos of the vehicles if there is visible damage. If you have visible injuries, take photos of them too. Having a photo record of the accident can be invaluable when it comes to making a claim later on.
- You can these days call your insurance company and let them know at this time but realistically, as soon as practible.
- Some insurers provide an app for your phone in case of an accident - it is handy to have this already downloaded and available
Advisr does not provide advice and does not hold a financial service license (AFSL). All information above has been provided by Robert Cooper.