6 things to consider when buying your car insurance

Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
Our authors
, updated on August 31st, 2023       

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If you have wheels and you are not insured, is like walking through a field of thorns and hoping that you don’t get pricked. Even if you are the best driver that Australia has ever seen, someone else’s dodgy driving can cause an accident that will put a big dent in your financial pockets. Here are six things you should consider when shopping around for car insurance.

1. Know what type of car insurance you are looking for

Before we start off you need to be already covered by the Compulsory Third Party (CPT) insurance. You are usually automatically covered when you register your car, but if it so happened that this has not been done yet then it’s time.

Comprehensive car insurance

Comprehensive car insurance is one of the best covers you can get for your car as it covers damages even if you were at fault. It can cover the cost of repairs and replacing your car. However, this differs for each car based on its make, age, and its condition. The amount that will be paid will be organised by you and your car insurance broker. It is also advisable that you speak to professional financial lender that can advise you on which alternative cover will best work for you.

Third Party Property

This is your most basic insurance that will help you cover any damage caused to yours or another parties vehicle in the event of an accident. Aussies pay an average of $1,027 per year for car insurance. Of course, the cost will differ from state to state with Tasmania being the cheapest at $811 a year. You can breathe easily when it comes to paying off the bill. Your car insurance company will have you covered.

Third party property (with fire and theft)

If you are looking for something that is just as good as comprehensive car insurance, but is not pricey then this is your next go to. It covers your vehicle from calamities that could possible cause your car to be written off.

2. Read the fine print

It is important that you know what your car insurance does and doesn’t cover. Furthermore, speaking to a professional financial advisor will help you understand your car insurance better. Not every policy will cover the contents of your car, which can be devastating if you have state of the art fixtures that cost you an arm and a leg. Ask to see if they cover valuables such as electronics or cash that could get stolen.

3. Look at all angles

Look at all the possible holes that your car insurer will and will not cover. An example can be, knowing whether your car insurance company will cover your vehicle if it so happened that the petrol station you were refilling in filled your car with contaminated fuel.

4. Make your discounts work for you

Know what discounts your current car insurer has. Especially if you have other policies with them. Take your car safety one extra step by installing things such as an approved engine immobiliser or a car alarm. This will help you receive a discount. When applying for your car insurance you can always ask your insurer what available discounts they have, and if you can add any safety features that will give you access to these discounts. Always remember to compare before you settle.

5. Know the difference between Agreed value and Market value

Your pride and joy could be written off due to an accident, theft or even old age. Your insurer will either ask you if you want to place your car under the market or agreed value should it be written off. The market value will determine how you will be compensated when you make your claim based on the cars make, model, and age. On the other hand, Agreed value is the set amount that you have placed on your vehicle that will be fixed upon the policy renewal date.

6. Know what impacts the cost of your car insurance

There are many factors that are taken into consideration when it comes to how much you will be paying for your car insurance. Things such as your sex, age, driving experience, where you live, your claims history, the colour of your car and typical driving habits you have can all factor into the final amount you could be paying. You can do yourself a favour by getting yourself the best deal by speaking to a financial advisor and constantly comparing prices.