Top Tips For Buying Car Insurance

You've bought your dream car and you’re about to sit in the driver’s seat for the first time as the new owner. Before you turn the ignition on, there’s something you must consider: Car insurance. 

While it might not be as exciting as choosing your new car, car insurance is an essential step in the car buying process. 

Car insurance is a way to protect yourself and your family from the very worst that could happen on the road. If a situation arises, car insurance will help you get back on your feet and back on the road as soon as possible.

It can be confusing, with so many car insurance options to choose from it’s hard to know where to start, and whether you are choosing the right insurance policy. That's why we've rounded up some of the most important points to consider when choosing car insurance.

When should you get your car insured?

You should get your car insured from the moment you take ownership of the vehicle. Car insurance will protect you and your car in the event of an accident, or unforeseen circumstances (depending upon your insurance coverage). 

If you don't have car insurance you run the risk of losing your assets (including your car) and exposing yourself to potential lawsuits if any incident occurs. Car insurance covers damage to your own vehicle and its contents, as well as the medical bills for people who are injured in an accident caused.

Also, it’s important to keep in mind If you obtain car finance through Driva for your loan to settle with any of our lenders, you’ll need to make sure you have taken out comprehensive car insurance.

Can I buy car insurance online?

Getting car insurance is quick, easy and can even be completed online. At Driva, we’ve partnered with CGU Insurance to offer comprehensive vehicle insurance to our customers. We only trust the experts, and our insurance partner CGU has over 160 years of insurance experience.

Does getting car insurance quotes affect my credit score?

Let us assure you that getting a car insurance quote won’t affect your credit score.

Car insurance companies don't check your credit history when they're looking at your insurance application. When you get car insurance quotes, you're just getting a quote. It’s not a loan or credit application, so it won't affect your credit score.

What information is needed when getting car insurance?

With car insurance, you need to know what's important to you, what you can afford, and what kind of coverage you're looking for.

When comparing car insurance policies and applying, your insurance provider will ask you a series of questions. There will be a number of questions about the specifics of the car to be insured – this includes the type of car, the market value, and whether the car has any modifications. In addition, the insurance provider may ask questions about where the car is parked overnight, the age of the drivers, and whether any of the drivers have had any recent 'at-fault' incidents.

The car insurance provider asks these questions because they want to know the likelihood of you making a claim. If you have a history of accidents, that indicates a higher risk for them - and therefore it may increase your car insurance premiums (the amount you pay each year). 

What are the different types of car insurance available?

After you have provided the above details to the car insurance provider, you will be asked to select a level of insurance. The level of cover you choose is based on your individual needs and your budget.

There are many different types of car insurance policies available, and it's important to know the difference. 

Every car on the road must have ‘compulsory third party’ (CTP) insurance as a bare minimum. CTP insurance provides owners and drivers of registered vehicles with liability cover for costs incurred if they cause a car accident that results in an injury to another person. This type of insurance is automatically included in your car registration cost (except in New South Wales, where you need to purchase it separately). 

The other types of car insurance available include comprehensive insurance, third party property insurance, and third party property, fire and theft insurance. These differences in insurance range in the level of coverage, and subsequently in cost.

Here is a breakdown of the difference between the three types of insurance available:

Comprehensive car insurance

This covers repairs to your car, no matter who's responsible for an accident and regardless of the cause. It also covers your car if it's stolen or damaged by fire, flood or vandalism. This is the highest level of insurance available.

Third-party property insurance

This covers damage to other people’s property (including the car itself) when you’re at fault in an accident.

Third-party property, fire and theft insurance

This covers property damage, as well as your car if it's stolen or damaged by fire.

Note that different types of car insurance available vary by state, but there are some commonalities.

Regardless of the level of insurance coverage you choose, you may have to pay a car insurance excess when you make an insurance claim. The excess is the amount you agree to contribute towards the cost of a claim. This amount should be discussed with your insurance provider during the application process as it affects your premium.

Which car insurance should I choose?

Car insurance is a personal choice, and you need to consider what you're looking for in terms of coverage and value for money.

For example, are you looking for a policy that will cover your car if it gets stolen? Or would you rather have a policy that pays out if your car is damaged in an accident, regardless of fault? There are lots of ways to protect yourself and your property, so consider what matters most to you, and your own individual finances before making a decision.

Is it necessary to buy insurance from the dealer?

Purchasing insurance from the dealer isn’t necessary. While it is important to be insured from the moment you hop into the driver’s seat, you don’t necessarily need to purchase it directly from the dealer. 

Car dealers may encourage buyers to purchase their insurance, however, you might be surprised to learn that your dealer doesn’t always offer the best deal on car insurance.  

Top tips when buying car insurance:

  • Different types of policies offer different amounts of coverage and benefits. Be sure to compare ‘apples with apples’ when comparing policies and insurance providers.
  •  Shop around for the best price and coverage. Car insurance rates vary widely between companies, so it's important to shop around to make sure you're getting both the best price and coverage.
  •  Ask about discounts when comparing options to obtain cheaper car insurance cover. Many companies offer discounts if you pay a higher excess, or you bundle various types of insurance together into one policy (for example, home and car insurance).
  • Make sure that all drivers are listed in your policy.
  • It's important to review your car insurance policy regularly, to ensure that you're always covered in the event of an accident. A good time to do this is when you change vehicles, or when you move to a new address.

At Driva, we're here to help! If you need assistance with your car insurance cover, we can walk you through the process of finding the right option to suit your needs and vehicle type (we offer motorcycle insurance too!) so that you can have peace of mind on the road.

Declan Flaherty

As the Digital Marketing Manager at Driva you can find Declan during the day transfixed by a flurry of spreadsheets, mar-tech, Slack emojis and graphs all pointing in the right direction and keeping up to date with the latest car finance trends.

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