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Different types of insurance

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Minimum insurance requirements vary from State to State however there are 3 main types of insurance compulsory third party, third party fire and theft and comprehensive.

Minimum insurance requirements vary from State to State however there are 3 main types of insurance compulsory third party, third party fire and theft and comprehensive.

Compulsory insurance exists in every state, but the way you pay for it can vary. It may simply be included as a component of the car’s registration.

In New South Wales it is called a green slip and you can shop around for the best price and cover however you will not be able to register a vehicle without it. If you buy a car that is already registered you do not need to get a new green slip it continues until the registration expires. You just need to let the insurer know your details.

Third party insurance is cheaper than comprehensive and is designed to cover the other person if you are responsible for an accident. It does not cover any damage to your vehicle but will cover the damage you do to other property. It is a good choice if you have a cheaper car that is too expensive to warrant comprehensive cover as it gives you peace of mind that you won’t have to pay for damage to another vehicle.

Comprehensive cover gives you the most protection. It protects your vehicle and any damage you do to other vehicles or property.

The cost of comprehensive varies widely and different insurers cover different things. Generally you can reduce the cost by electing to pay a higher excess. This means when you claim you will have to pay an excess of anywhere from $100- $1000 depending on the policy you choose. The higher the excess the lower the up front insurance costs. This is obviously beneficial as you only pay more when you claim however you have to be ready to cover the excess cost if you do have an accident.

Payment Most insurers offer different ways and times to pay. One of the most popular is a monthly direct debit, some insurers’ charge slightly more for this than if you paid it in one lump sum but it means you can spread the cost out rather than having to come up with the money up front.

You can usually pay by Visa, Mastercard, Direct Debit or BPay and if you are financing the vehicle you can add the insurance cost into the amount you borrow. (If the car is financed you may be required to pay the entire amount up front so the lender can be confident the car is covered).