Receive million dollar liability cover with third party property damage car insurance
Third party property damage (TPPD) is a basic form of car insurance for Australian drivers. This type of policy provides cover when your vehicle causes damage to someone else’s vehicle or property. In addition to covering your legal liability up to a certain limit, usually $20 or $30 million, these policies sometimes also include cover for when your car is damaged in a no-fault accident with an uninsured motorist.
Third party property damage car insurance is available from a wide variety of respected Australian insurance providers.
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What does third party property damage car insurance actually cover?
Third party property damage is defined as car insurance which covers you for damage to other people’s property, for example their car or home, up to a certain limit (commonly $20 million). Third party property damage covers only this and nothing else, with the exception of some policies which partially cover damage to your own vehicle as well, even if you were found to be at fault. Cover includes:
- Repair or replacement costs for damage to other people’s property.
- Legal costs you incur while defending yourself against liability claims.
- Limited damage to your car if you’re involved in a collision with a vehicle driven by an uninsured driver.
Although third party property damage is a pared down policy, some insurers have additional benefits that provide a little added security without raising costs to the level of a comprehensive policy. These additional benefits may include things like:
- Loss or damage to your personal items
- Cover for modifications and accessories
- Emergency repairs
- Temporary replacement vehicle
What’s the difference between third party and other car insurance?
Comprehensive, third party fire & theft and third party property damage are the three levels of car insurance you can find from most insurance providers.
- Third party property damage (TPPD) cover. TPPD is the most basic form of cover and protects you when you are legally liable for damaging someone else’s vehicle or property.
- Third party fire & theft (TPP F&T). TPP F&T cover offers the same protection but also covers you if your vehicle catches fire or is stolen. This is a mid-level policy that is more expensive than third party property damage insurance.
- Comprehensive. Comprehensive insurance offers the broadest range of car insurance cover available. As well as cover for all the above, it also covers damage to your car from accident, storm, flood, hail and malicious acts. New for old replacement and guaranteed repairs are common features of a comprehensive policy.
Compulsory third party (CTP) insurance is mandatory in Australia, and is a completely separate policy.
|Immediate Replacement Car|
|Damage to other people's proprety|
|Emergency Accommodation, Transport and Repairs|
|Contents Inside the Car|
|Storm or Flood|
|Hire car following theft|
How much does it cost?
When calculating your third party property damage insurance premiums, insurers consider questions like:
- How old are the people driving your car? Younger drivers are more inexperienced and also feature heavily in Australian road crash statistics, which means they cost more to insure.
- Are you a good driver? Drivers with a long, blemish-free driving record will obviously cost less to insure than those who have made claims in the past and also have multiple traffic infringements to their name.
- How much excess do you want to pay? If you want to save money on your premiums you can elect to pay a higher excess on your car insurance policy.
- Where do you keep your car at night? Areas with high theft and accident risks will generally result in higher insurance premiums for car owners.
- What type of car do you drive? Inexpensive, low powered cars are typically cheaper to cover than high powered, expensive vehicles. Any modifications and accessories fitted to your vehicle will also be taken into account.
- How much do you use your car? If your vehicle is used for business purposes, or more frequently than most, you may have to pay a higher premium. Alternatively, if you don't drive too often you can opt for Pay As You Drive policies.
Tips for getting lower premiums
- Shop around. Don’t just sign up for the first policy you see just because you saw a convincing ad on TV. Compare the cover offered by different policies to find a better deal. If you think you’re paying too much, get quotes from other insurers.
- Compare quotes. Getting car insurance quotes online is quick and easy. Obtain quotes from multiple insurers and compare them in relation to the level of cover offered.
- Choose a higher excess. Your insurer will offer you a lower premium in return.
- Nominate drivers. If you can nominate certain people to drive your car, especially if they are all over the age of 25, this will reduce the cost of your cover.
- Bundle your cover. If you have a separate policy (for example home insurance) with a provider, they may offer you a discount on your car insurance policy.
- Buy online. Many insurers offer sizeable discounts to their customers for purchasing their policies online.
- Secure your vehicle. Vehicles with security systems and those that are kept garaged overnight are less expensive to insure than ones parked on the street or without security systems.
What type of car insurance do I need?
How do I choose the right car insurance policy for me? You need to consider a range of factors.
- Is your car expensive? If you drive an expensive car, you will most likely want to take out comprehensive cover to give your car – and your wallet – the ultimate protection. If your car is a little less valuable, selecting a lower level of cover like third party property or third party fire & theft may be a more suitable option.
- Do I need these benefits? You only want to pay for the cover benefits and options you’re likely to use, so make sure you know exactly what is covered under these different policies before you decide on the right one for you.
- Would your car be expensive to repair? Consider how likely it is that you’ll be able to afford the repairs if you’re involved in an accident, or how you’ll manage on a day-to-day basis if your car is stolen and you don’t have cover in place. Answering a few simple hypothetical questions will help you determine the level of cover that suits your needs.
What kind of exclusions are there?
There are some general exclusions that apply to most third party property damage policies. You won't be cover if your car:
- Was being used for driving tuition or demonstrated for sale at the time of the incident
- Was being driven by an unlicensed driver
- Was being used in a race, trial or test
- Has been modified from the maker’s specifications or fitted non-standard accessories
- Was being driven in an unsafe or un-roadworthy condition
- Was overloaded
- Was being used for hire or reward
- If the driver was under the influence of alcohol or drugs, or if they refused to submit to drug and alcohol testing
- If your claim is for the reduced value of your vehicle after repairs have been properly performed
- If your claim is for personal items stolen from your car
- If your claim is for repairs carried out without the insurer’s consent
- If your claim is for depreciation, wear and tear, rust or corrosion
- If your claim is for mechanical, structural or electrical breakdown
- If your claim is for consequential loss
- If you have failed to take reasonable steps to prevent any loss or damage
- If your claim is for tyre damage caused by braking, punctures bursts and cuts
- If the loss or damage was incurred thanks to a deliberate or reckless act by you
- If your claim results from the lawful seizure or repossession of your car
- If your claim relates to acts of war or terrorism
- If your claim is for additional loss suffered when driving your car after it has been involved in an accident
Some final questions you might have
Q. What does third party insurance mean?
- A. Third party insurance is all about protecting other people, known as third parties, from any damage you might accidentally cause while driving. The more basic third party car insurance, usually known as third party property damage, only covers this. More thorough third party car insurance policies, like third party fire & theft, cover this as well as any damage to your own car from fire or theft. Comprehensive car insurance includes third party cover as well as a complete range of extra protection for your own vehicle.
Q. Does third party insurance cover theft?
- A. Third party property damage (TPPD) car insurance does not cover theft. You will need third party fire & theft or comprehensive car insurance to protect against this.
Q. Does third party insurance cover windscreen damage?
- A. Usually not. Most car insurance policies, even comprehensive ones, do not cover windscreen damage. This is usually clearly mentioned as an exclusion. It is unlikely that any third party property damage car insurance policy will cover damage to your own windscreen.
Q. How does third party insurance work?
- The idea is that all car accidents have one party who’s at fault, and who will need to pay for injuries with CTP insurance, and pay for property damage with third party damage insurance. Ideally everyone is insured, and all road accident victims have an easy way to get compensation.
Q. Will my third party insurance cover me when driving other cars?
- A. No. Third party insurance is for your vehicle. Your car is insured to be driven by certain people as described in the insurance policy. You are not automatically covered by your usual third party insurance when driving other vehicles.
Q. Does this party insurance cover accidents?
- A. Yes. Third party insurance is all about paying for vehicles and property damaged in accidents. The person found to be responsible for an accident must use their third party insurance to pay damage to the other person’s vehicle. If you were not the guilty party in an accident you may be required to prove that the other person was.
Q. How can I purchase car insurance?
- A. You can purchase car insurance by phoning an insurance provider or visiting their website. Keep in mind that you may receive a discount if you buy cover online.
Q. When does my policy start if I buy cover online?
- A. Your insurance cover can begin on whichever date you request. This could be the same day you order cover or at a future date.
Q. What is a no claim bonus?
- A. Insurers offer no claim bonuses and discounts to reward their customers who are safe drivers. You’ll receive a discount on your premium for every year you do not make a claim on your policy (up to a maximum discount limit).
Q. What happens if I don’t provide the full details of my driving history to my insurer?
- A. You have a duty of disclosure to tell your insurer everything that may influence their decision to offer you cover. Failure to be completely honest about everything could lead to your claim being reduced or refused and your policy cancelled.
Q. Which policy offers the car insurance for the lowest price?
- A. Third party property damage is the most affordable policy available because it offers the most basic level of cover. Comprehensive insurance offers the highest level of cover and is also the most expensive.
Q. I modified my car, does that affect my insurance?
- A. If you're planning on modifying your car in anyway, you need to be aware of how it will impact your insurance. Some insurers will not cover cars with custom paint jobs, engine or body modifications.
Q. Are tools of trade covered by TPPD?
- A. No. TPPD policies do not cover for the theft of tools of trade.
Q. Is my baby seat covered?
- A. No. TPPD policies do not cover baby capsules or child seats.
What should I look for in a TPPD policy?
The exact terms and conditions of your TPPD insurance depend on the details of the policy. The three main terms to look out for are agreed value or market value, the amount of excess and whether or not it includes an uninsured motorist extension.
What is the difference between agreed and market value?
Car insurance policies are offered in either agreed value or market value form. If you take out a market value policy, your car will be covered up to its market value at the time of a claim, subject to depreciation. The market value is determined by the make, model, age and condition of your vehicle.
Under an agreed value car insurance policy, you and your insurer agree upon the value of your car and lock in that value until the time comes to renew your cover.
What does excess mean?
The excess is the amount you are required to pay to contribute to the cost of your claim. As an example, if your excess is $250 and your claim is for $2,000, you will pay the first $250 of your claim and your insurer will cover the remaining $1,750. Insurers will charge a basic excess, which is the minimum you’ll need to contribute when you make a claim, as well as a voluntary excess (in return for a lower premium) and an age excess (if your policy features a young or inexperienced driver). Depending on your insurance provider and your individual circumstances, other excesses may also apply to your cover.
What is an uninsured motorist extension?
An uninsured motorist extension (UME) is an optional extra available with some third party car insurance. It covers damage to your vehicle up to set limits (typically around $3,000-$5,000) damage cover in the event that it’s damaged by an uninsured driver, that you were not at fault and that you can provide the uninsured driver’s name and address.
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