Finding the ideal car insurance plan can be tricky, especially for young drivers. Getting your first vehicle and making your way out onto the road is an exciting milestone in life. However, you can’t legally do so without being adequately protected by an insurance policy. In Australia, it is illegal to drive a vehicle without insurance. Aside from the mandated amount of insurance, however, you may consider several different coverage options.
Compulsory Third-Party (CTP) Insurance
In Australia, every driver is legally required to have at least this amount of coverage. Compulsory third-party insurance provides coverage for damages sustained to the driver and passengers in the other vehicle in the event of a collision. If you or the passengers in your own vehicle suffered injuries as a result of the collision, they would not be included under CTP coverage plans. Suppose damage was inflicted upon both cars and a guard rail during the accident. In that case, the driver will be responsible for covering all fees related to repairs.
CTP insurance does not cover anything other than the people in the opposite vehicle. While CTP is the legal requirement, it is the bare minimum coverage. Accordingly, it is not recommended for young drivers. As a newbie to the roadway, you must understand that accidents happen. No matter how safe or how good of a driver you deem yourself to be, you are not in control of the actions of others. Additionally, other accidents aside from collisions may occur. For example, if you bump the mailbox pulling out of the driveway one day, you will be responsible for paying for it.
Comprehensive Car Insurance
As the name suggests, this type of insurance plan is the most comprehensive of all coverage options. Auto insurers assume responsibility for damages to the driver, passengers, vehicles, and property damages in a collision with comprehensive coverage. Plans vary, but they also commonly cover natural disasters, theft, vandalism, and fire damage.
Unfortunately, a fully comprehensive coverage plan may not be offered to young drivers due to the risk the insurance company assumes by insuring them. Insurance companies use risk assessment models to determine eligibility for specific plans and pricing. These risk assessments consider factors like driving history, age, and other demographics.
Add-ons
Fortunately, insurance plans have come to be highly flexible over the years. Most people choose a basic insurance plan and pair it with “add-ons” or additional coverages. For example, someone who lives in an area that is prone to flooding may choose a basic insurance plan and then add on collision coverage and flood damage protection. Now, they will be protected in the event that they are involved in an accident, or their car falls prey to flood damage.
It can be challenging to compare, contrast, and customize insurance plans when you have little experience with the auto insurance industry. First, examine your demographic, location, and mandatory requirements. Then, research a few insurance providers that offer the coverage you need. Next, try using an insurance comparison tool like the one on iSelect’s website. These tools can help you with a side-by-side comparison of each of the insurance providers you are contemplating. When comparing car insurance, it is best to take the following factors into consideration:
- Coverage
- Pricing
- Deductibles
Of course, there may be additional factors to consider depending on your vehicle, location, and individual situation. In some cases, you may be able to find an insurance provider that offers special plans or discounted pricing for new drivers. Check for student discounts or good driver programs in your area to ensure you maximize your coverage without overspending.