Car insurance protects you against costs and liabilities if you are in an accident or your vehicle is stolen, damaged or vandalised.
You do not have to purchase insurance through a licensed motor car trader; it may be cheaper to arrange your own. Contact other insurance companies to compare the cost of insurance (the premium) and policy coverage.
Premiums vary between car makes and models. Insurance may be more expensive for cars bought under finance and for modified sports cars. You may also pay more if you or someone under the age of 25 will be driving the car.
Types of car insurance
There are three main types:
- Comprehensive insurance offers the greatest protection, and covers you against fire, theft, accident damage to your car, and damage to other cars and property.
- Third party property insurance covers you against damage caused to other cars and property. It does not provide any protection for your car. If you are considering this type of insurance, you should also ask for information on ‘uninsured motorist cover’. This partially protects you against damage to your car, to a limited amount, if an uninsured driver is at fault. Other conditions may also apply.
- Third party property, fire and theft insurance is similar to third party property insurance, but with additional cover for damage to your car caused by fire or theft.
Before signing your insurance policy, make sure you read the policy booklet and product disclosure statement. These documents will specify conditions such as who is allowed to drive the vehicle you are insuring.
Policy cancellation or claim refusal
Your insurer may cancel your policy or refuse your claim if you were under the influence of drugs or alcohol at the time of an incident, or you did not disclose:
- modifications to your car
- your accident history
- prior driving conditions or offences
- personal disabilities.
If you disagree with a cancellation or claim refusal, you should write to your insurer. If you are still not satisfied, visit the Financial Ombudsman Service website.