Navigate common questions about car insurance

Whether you’ve just got your licence or are an experienced driver, car insurance is essential as a vehicle owner. But with so many options available, it can be hard to know if you’re getting the best cover. 

You're in luck though, as we’ve answered some of the most commonly asked questions about car insurance:

What are the different types of car insurance? 

There are four types of car insurance: 

1. Compulsory third party (CTP) insurance is the only cover that is mandatory in Australia – you cannot drive without it. It covers the costs of compensation and medical care if you’re responsible for injuring someone in a car accident. CTP doesn't cover the damage caused to vehicles or property in the accident. 
2. Third-party property insurance only covers damage to other vehicles or property in an accident, but not the cost of repairs to your own car. 
3. Third-party, fire and theft insurance offers the same level of cover as third-party only insurance, but also includes damage to your car if it’s stolen or damaged by fire. 
4. Comprehensive insurance is the most extensive cover available. If you have an accident, you’ll be covered for damage to your own car as well as the vehicle or property of others. It also covers the repair or replacement of your car if it’s stolen or damaged by fire, weather or vandalism.

What is excess in car insurance? 

Car insurance saves you from having to pay the full costs of repairs if you’re at-fault in an accident – but that doesn’t mean you pay nothing at all. When you make a claim, your ‘excess’ is the contribution you need to make to cover the cost of repairs.

The amount of your excess will depend on the terms of your policy but generally the higher your excess, the lower your premiums. Many insurers also allow you to choose to pay extra premiums to reduce your excess in the event of a claim. 

You can find the amount of excess you’ll need to pay on your Certificate of Insurance.

Who is protected while driving my car? 

If you have comprehensive insurance then your car is protected when a driver other than you is driving at the time of the accident, but there could be exclusions, such as:

• drivers who are younger than any age restrictions shown on your Certificate of Insurance – many insurers don’t cover drivers under the age of 25;
• any learner drivers who are driving without the supervision of a fully licensed driver;
• anyone who is driving without a license;
• any drivers who are breaking the rules of their provisional driving licence, for example P platers driving over their set speed limit;
• any driver who refuses to take an alcohol or drug test when asked to by the police;
• any driver who was driving under the influence of drugs or has a blood alcohol level over the legal amount. 

If you are able to prove that you had no reason to suspect that the person driving your car was under the influence of drugs or alcohol, then that exclusion may not apply. But speak to your insurance provider for clarity.

Remember that no car insurance will cover everything, so it’s important that you read the Product Disclosure Statement to understand what is protected under your policy.

If my friend is driving my car, are they financially responsible if something happens? 

As the person listed on the insurance policy, you are financially responsible. However, if your friend was not at-fault for the accident, you should be able to make a claim against the other driver or their insurance. If your friend was at-fault for the crash, you could make a claim on your insurance policy if it covers an additional driver. 

If your friend isn’t listed as a driver, you could be charged an additional excess, receive a lower payout, or even have your claim refused. So, before you allow anyone else to drive your car, always be sure to check with your insurance provider about what is covered. 

Does the colour of my car impact premiums? 

When insurers work out your premiums, they are looking at how safe your car is and what it would cost to repair it. The colour of your car could affect premiums if the type of paint used makes it more expensive to repair. Some insurers may also consider darker coloured cars to be less safe due to their lack of visibility at night – while others won’t ask for the colour of your car at all, which is why it’s important to shop around and get a few quotes before deciding on your insurance provider.

What happens to my car insurance if I modify my car? 

Modifying your car could affect your insurance premium. So, if you are planning to modify your car and fit it with non-standard parts, you should always inform your insurer and obtain their written consent to ensure that your car is covered.

Examples of modifications include window tinting, a spoiler, a sunroof, customised colour, enhanced audio system, alloy wheels, neon lights, or a new exhaust system.

Can I choose my repairer in case of a claim? 

Some insurers allow you to choose your repairer, while others may have a network of approved repairers you can choose from. Check your policy details for this information as it will vary between insurance providers.

At Real Car Insurance, a qualified repairer located as close as possible to your home or work from our extensive network is selected. The repairs to your car are covered by a guarantee when you use one of our approved repairers. 

Do I need comprehensive car insurance?

Comprehensive car insurance provides the highest level of protection from a wide range of risks, including the cost of accidents, theft, and damage to your car and belongings, as well as emergency accommodation if you get stranded. The cover you choose will depend on various factors, including your budget, the value of your car, whether you have secure parking for your car, how often you drive your car, if you’ll list other drivers on your car, and so on.

If your car isn’t valued at much and you’re willing to pay the costs of repairs in case something goes wrong, you might consider going for the cheaper option of third-party property damage insurance (not to be confused with CTP). But if your car is new or in good condition and you want to reduce out-of-pocket expenses in case of an accident, then comprehensive cover would give you peace of mind when you’re behind the wheel. 

Can I drive my car uninsured? 

It is illegal to drive without CTP insurance in Australia. In most states and territories, CTP is included in your registration but in NSW, Queensland, and the ACT you’ll have to pay for it separately. If you’re caught driving without CTP, you may face some hefty fines – and if you injure someone in a crash, you might have to pay their medical bills, which could run into the thousands or even tens of thousands, if not more! 

Apart from CTP, other types of car insurance are not compulsory. But remember, if you’re involved in an accident and are the at-fault driver, you won’t be covered for the costs of repairing any damages caused to your car or the other party’s car – meaning you will have to pay for it out of pocket.

What is Pay As You Drive Insurance? 

Pay As You Drive Car Insurance gives you all the benefits of comprehensive car insurance but the difference is you only pay for the kilometres you plan to drive. This award-winning option from Real Car Insurance may be ideal for those who don’t drive often, such as short trip drivers, retirees, and public transport users.   

Is your car covered? 

Is your car adequately covered? Be sure to re-evaluate your level of car insurance regularly. Consider Real Car Insurance and get a quote today to see just how easy it is to purchase value-for-money car insurance without having to compromise on quality.