When packaging a car, you’ll automatically be given full comprehensive motor vehicle insurance, but have you ever questioned why?
All banks who lend you money as a Novated Lease require you to have comprehensive insurance. The main reason is that should you have an accident or your car is vandalised and the vehicle is written off or if your car gets stolen, the financier is assured of receiving the majority, if not all of the funds, back that they have lent you.
The top level of insurance can protect you from the significant costs and inconveniences should an accident occur. However you will need to be careful when considering what kind of insurance policy is best for you. There are numerous providers with a range of different policies, not all of them provide adequate cover.
The different types of policies to choose from are:
– Compulsory Third Party (CTP) insurance is required in Australia and is incorporated into your Vehicle Registration only covers for personal injuries caused due to an accident involving your vehicle. It does not cover for any damage to the vehicle.
– Third Party Property covers for damage to other people’s property and legal costs, but does not cover damage to your own vehicle.
– Third Party Fire and Theft cover for damage to other people’s property and legal costs, but does not cover damage to your own vehicle in addition to covering your vehicle for, as it states, fire and theft.
– Comprehensive policies cover for the repair or replacement of your vehicle for events including theft, collision, fire, malicious damage and weather-related damage, such as hail. This is the required level if you have a novated lease for your car.
Useful tips when looking for the right car insurance policy:
– Vehicle Details – ensure the vehicle details on the policy are identical to the vehicle you are insuring! Pay close attention to any additional or standard accessories the vehicle came with when purchased i.e. side skirts, full size spare wheel, tow bar kit, reversing camera, bull bar, leather interior, premium sound, etc.
– Storage – be 100% clear on how the vehicle is stored overnight or during the day (i.e. garaged, carport, under cover in secure parking, in driveway, on the street etc.) as it is an important factor to the insurers consideration of your risk and premium loading/discount.
– Repairer Options– Choice of repairer means that you can have the convenience of choosing the repairer you want, so you have confidence in the quality of the repair work. The repairer may also be closer to your home or work. Some insurers will have their own approved repairers that they use and can guarantee the works and they try to have a number of repairers so that there is one close to you. In addition to either option of repairers, some insurers will require your car to be taken to an assessment center for their own mechanics to assess the damage and approve a level of funds for the repairs. All these should have a bearing on your choice of insurer.
– Excess Levels – The excess is the amount you have to pay at claim time. A lower excess amount, generally equates to a high premium and vice versa – higher excess results in a lower ongoing premium. You must choose if you are comfortable paying more at claim, with the idea that you don’t believe you will need to claim (of course, you are an excellent driver), or if you pay a lower excess at claim as you might be prone to an accident or two.
– Claims Service/ Process – Although no one actually wants to believe that they will need to claim, there may be an instance where you need to and you want to make sure that it’s an easy, straight forward process. You can find a heap of reviews on the internet of people’s experiences with insurance companies and you should read a few before settling on your insurer. You could also use a broker, as it removes the hassle and headaches that come with car insurance claims, and ensures that if there is a problem with your claim you have insurance professionals/ experts working for you to get the matter resolved.
If you follow these tips they can help you keep your premiums reasonable for the cover the fits your requirements.
At JBS Salary Packaging, we understand the importance of protecting your 2nd most valuable asset.
If you would like to review any of your motor vehicle insurances, please contact JBS Salary Packaging on 03 8677 0677 or email us here.