Comprehensive cover is the highest level of car insurance you can get on the market. It protects you if you're in an accident, a big storm thrashes your car, or someone hits your car with their shopping trolley.
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Do I need comprehensive car insurance?
In most cases, getting comprehensive car insurance is a good idea. If you care about your car or depend on it every day, it makes sense to invest in comprehensive car insurance.
It's the only type of car insurance policy that will properly cover you if your car is damaged in an accident. And if it is and you're unable to drive it, most comprehensive car insurance policies will also give you a rental car, and in some instances, a brand new car. You'll also be covered for any malicious damage or vandalism, damage from hail or storms, theft, fire, emergency accommodation, and much more.
One time that it might not be worth getting comprehensive car insurance is if you're young as the cost of comprehensive car insurance might cost more than the car itself. Another time you should reconsider taking out comprehensive car insurance is if you've got a cheap car you might not care much about, as you might not get your money's worth if the car is written off.
How much does comprehensive car insurance cost?
During our analysis of 6 Australian car insurance brands, we found that the cost of comprehensive car insurance varies from $75 to $91 a month. So if you want to save on costs, your best bet will probably be to get quotes from a bunch of brands.
To get these costs, we averaged together the cost of a male and a female Sydneysider, both born on 1/1/1983, driving a 2016 Ford Falcon.
Your cost will differ depending on your circumstances. Some things that can affect the cost of your quote include your gender, the type of car you drive, the colour of the car, how long you have been driving, the amount of cover you need, plus more. Be sure to read the PDS to find cover that suits you.
You may be asking yourself, 'What is comprehensive car insurance and what does it cover?' Comprehensive car insurance covers loss or damage to your own vehicle and your legal liability to a third party for loss or damage to their vehicle or property. A typical comprehensive policy covers your vehicle against the following:
- Flood, hail or storm damage
- Malicious acts
- Fire and theft
- Accident or collision
- Damage to third party property.
How do other companies stack up?
We took a look at some other comprehensive insurance policies, and here's what we found:
What extra cover should I consider?
Most comprehensive policies also include a range of extras, or have them as options:
- Use of hire car
- Windscreen replacement
- Replacement car cover
- Legal liability cover
- Lock and key replacement
Cover is usually dependent on the vehicle being used by a nominated driver(s) for private and occasional business use only and never for commercial use or driving tuition.
An excess is the amount you must pay towards a claim. Most comprehensive policies let you choose the amount of excess. The more you choose, the less your premium will be. However, it is important to ensure when opting for a higher excess that you will have sufficient funds on hand to pay it if required.
As the cost of repairs resulting from minor accidents is often less than $1,000, many people opt for an excess around this level, so they do not have to claim on their insurance and jeopardise their rating.
The three main types of excesses are the standard, or basic, excess, which is an amount agreed to when you take out the policy and which you have to pay when making a claim, an age excess which usually applies to less experienced drivers under the age of 25, and a special excess which may be applied to some drivers in relation to a specific past incident. You may be able to choose your standard excess level which makes a big difference to premiums.
Which is the best policy for me? It's a common question but a tough one to answer. Everyone’s needs and ideas about the best are different.
For example, one driver may be after the car insurance for under 25 drivers, while another is after comprehensive car insurance for seniors. One driver may want low priced cover against common risks, while another wants to pay more for complete peace of mind. It is these differences in needs that will determine the best* policy for you.
Another question is whether third party or comprehensive insurance better for your needs.
- Third party car insurance covers you for damage your vehicle causes to other people's vehicles or property. It generally does not cover you for theft of or damage to your own vehicle. It costs less than comprehensive car insurance, but offers little to no protection for your own vehicle. This is a good choice if you’re driving an older or less valuable car. It covers you from the most potentially expensive risks, but doesn’t extend unnecessary levels of protection to your own vehicle.
- Comprehensive car insurance covers you for third party damage and for damage to your own vehicle. It also covers you for fire, theft and any other dangers named in the insurance policy. Most also offer a range of other benefits such as towing, windscreen replacement and much more. This is a good choice for people with more expensive cars, or one they’re still making payments on, who want the highest level of cover available. Some car loans may require you to take out comprehensive cover.
What's the right type of car insurance for you?
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Despite the higher cost of comprehensive car insurance, there are ways to reduce your premiums and make it more affordable. Ensure that when you look at a policy you consider:
- Shop around. Not all insurers charge the same, so look for a good deal. Compare both prices and benefits offered to find a policy option that fits your needs and budget.
- Increasing your excess. Increasing your excess can ensure that your premiums stay lower.
- Looking for no-claim bonus discounts. These can save you as much as 70% on your premiums.
- Restricting usage to nominated drivers. Some insurers provide a discount if only you and your spouse drive the vehicle.
- Bundling your insurance. If you have other forms of insurance, you may be eligible for a discount if you add car insurance as well. Look for multi-policy discounts.
- Making your vehicle safer. Having a car alarm or immobiliser may earn you a discount from your insurer.
- Driving a smaller car. A car with less engine capacity costs less to insure than a bigger, more powerful model.
- Looking for an insurer who differentiates. Some comprehensive car insurers take into consideration how often you use your vehicle and reward adjust the premiums accordingly.
When applying for comprehensive insurance, it is very important that you tell your insurer anything that is likely to have an effect on how much they charge you for your policy. If you don’t comply with your Duty of Disclosure, and they discover you have not been totally honest with them, they may reduce your claim or even refuse to pay at all.
You should also advise your insurer when you situation changes, such as if you move house, modify your car, include additional drivers or start using your vehicle for a purpose other than that specified in the policy. All these things can affect your premium amount and the extent of your cover, so you need to be upfront at all times with your insurer.
Other questions you may have about comprehensive car insurance
* We got this cost by dividing the monthly premium for Budget Direct's policy into a daily amount.
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