CAR INSURANCE EXPLAINED

When Henry Ford carefully compiled the first automobile, he had no idea just how rapidly the idea would take off on a global scale. It is fair to say that in this day and age, many Australians would be lost without their cars. Cars make long-distance journeys possible and short trips quicker and easier than ever before. The car has embedded itself in its rightful place in our culture, making day-to-day life simpler and more comfortable.

However, with the convenience that cars bring, there is also a sinister underbelly that is the stuff of nightmares for many motorists. Drivers face dangers, such as collisions with other vehicles or loss of steering control in a busy lane - accidents which can cause severe damage to the driver’s vehicle, let alone their wellbeing. This is why insurance exists: to help out with costs after an accident so a motorist is not left to foot the entire bill without help.

There is a large range of car insurance options available, each offering different amounts of coverage. The general rule is that the more coverage you want, the greater your premium will be. In many Australian states, drivers are legally obliged to have some basic form of car insurance, so that in the event people are injured or even killed as a result of someone else’s driving, their medical bills or compensation will be covered by the insurer of the individual responsible.

For a greater premium, drivers can also be covered for damaging the property of a third party. They can also opt for greater coverage if they wish, so that in the event of an accident an insurer will pay out for repairs or, if the damage is great enough, even a brand new car! Some insurance policies will also provide coverage for fire damage and theft.

Your premium is established by other factors that determine how safely you drive and the likelihood that you may be involved in an accident. The way an insurer thinks is simple: if somebody is more likely to cause an accident, they are more likely to make a claim that means that they will have to pay out. Therefore, that individual’s premium will be greater. This is why many insurance companies often make younger people pay more for car insurance than those who are older, as statistically, younger people cause more accidents.

If you have been driving for a long time without incident, there are incentives out there to reward your good driving. Insurance companies are making efforts so that people with a flawless driving record do not pay high premiums because of more accident-prone drivers.

You should now have a basic knowledge of what car insurance is for and how it works.  Car insurance is a necessity for new and old drivers alike and before you choose your policy, it is wise to research as much as possible to make sure you get the deal that is right for your individual needs.

Disclaimer: This insurance is arranged by A&G Insurance Services Pty Ltd (trading as Budget Direct) (ABN 61 003 617 909, AFSL 241 411) on behalf of the insurer, Auto & General Insurance Company Limited (ABN 42 111 5 86 353). Because we don’t know your financial needs, we can’t advise if this insurance will suit you. You should consider your needs and read the PDS before making a decision to buy insurance. To view or download a copy of our FSG and PDS click here. Car insurance not available in NT. If you purchase an insurance policy from Budget Direct, the owner or operator of the website upon which this advertisement was placed will be paid a fee for referring you to Budget Direct of $18.00 to $62.50 per policy, excluding GST and government charges. This advertisement is placed by A&G Insurance Services Pty Ltd.