Home' Navy News : April 15th 2010 Contents Finding it
hard to help
your people with
This film will help you.
Watch the video or order the DVD on the website
ADF Financial Services Consumer Council
April 15, 2010
ASIC Chairman, Tony D'Aloisio, says to
look at car insurance options carefully
before choosing a policy.
for best deal
THE type of cover you take
out will affect how much
you have to pay if you're
involved in an accident.
So, if you're about to buy a new
vehicle or if your insurance is up for
renewal, shop around for the best deal.
Compulsory third party
Compulsory third party (CTP)
insurance is the most important type of
car insurance. It covers death and inju-
ry to other people if you are involved in
an accident. You must have CTP insur-
ance to register your car. Go to your
State or Territory Roads and Traffic
Authority website to compare quotes
on CTP car insurance.
By law you are required to have
CTP insurance. This is sometimes
known as a green slip.
Questions to ask
If I crash into a luxury sports car
will I be able to afford the repairs?
Is my car likely to be broken into?
stolen or written off?
Choosing a policy
Car insurance policies are based
on either 'agreed' or 'market' value.
An agreed value policy has a set dol-
lar value for your vehicle. Market
value policies value your car based on
the make, model and condition. The
agreed value is usually higher than the
When you purchase a car insur-
ance policy you will agree to pay a
premium, that is, a regular amount that
covers the cost of the insurance. You
will also agree to an excess, which
is the initial amount you will have to
pay if you make a claim on the policy.
Weigh up the difference between hav-
ing a high premium and low excess
versus paying a lower premium and
having to pay a higher excess if you
have an accident.
Make sure you understand the level
of cover before signing up. All insur-
ance policies come with 'exclusions'.
Exclusions are things not covered by
your policy. Typical car insurance
exclusions to watch out for include:
Damage from mechanical failure,
modifications, depreciation, rust and
wear and tear.
Lost wages if you can't drive.
Damage caused because your car
was unsafe or in a race.
Damage caused if the driver was
unlicensed, drunk or under the influ-
ence of drugs.
The driver wasn't covered by the
SMN Baker gets into debt
SMN Baker decided not to get any
extra car insurance on top of his com-
pulsory third party because his car was
very old. A few months later, he hit a
brand new sports car, which needed
$10,000 worth of repairs.
Because he was not insured for
damage to other cars and without
access to such a huge amount of cash,
SMN Baker had to take out an expen-
sive personal loan to pay off the debt
over three years.
Drivers under 25
The cost of insurance is determined
by the level of risk your insurer is tak-
ing on. As more young drivers are
involved in accidents than older driv-
ers, most insurance companies charge
a higher premium for drivers under 25.
It pays to be extra vigilant with
checking the details and doing all the
appropriate paperwork and back checks
before buying any vehicle.
It's wise to go to your State or
Territory Roads and Traffic Authority
for helpful information on what you
need to do when buying a car. It's also
very important to call your insurer
before you buy to find out everything
they need to know about the car in
order to insure you.
If you're not covered when you
drive away having just bought your
new vehicle and you're involved in a
crash, even if it's not your fault, you
could end up with a very expensive
debt and no vehicle.
Visit ASIC's consumer and investor website,
FIDO at www.fido.gov.au or call 1300 300
630. Email ASIC with topics that interest you via
Additional types of car insurance
Compulsory third party insurance
only covers injuries or death to
other people in an accident.
Third party property insurance,
which covers damage to other
people's property (e.g. their car or
home) and your own legal costs.
Third party, fire and theft insurance,
which covers damage to other peo-
ple's property, and provides limited
cover for damage to your own car
caused by theft or fire.
Comprehensive insurance, which
covers damage to your own car
and other people's property if your
car is in an accident (including fire)
as well as theft.
WHAT YOU ARE COVERED FOR
BRAND NEW BABY: Make certain your pride and joy isn't so much val-
ueless scrap metal.
Photo: SGT Andrew Hetherington
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