Home' Air Force News : April 15th 2010 Contents Finding it
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ADF Financial Services Consumer Council
April 15, 2010
ASIC Chairman Tony D'Aloisio says look at
your car insurance carefully.
THE TYPE of cover you take
out will affect how much
you have to pay if you're
involved in an accident.
So if you're about to buy a new
vehicle or if your insurance is up for
renewal, shop around for the best deal.
Compulsory third party
Compulsory third party (CTP)
insurance is the most important type of
car insurance. It covers death and inju-
ry to other people if you are involved
in an accident. You must have CTP
insurance to register your car. This is
sometimes known as a green slip. Go
to your state or territory roads and traf-
fic authority website to compare quotes
on CTP car insurance.
Questions to ask
If I crash into a luxury sports car
will I be able to afford the repairs?
Is my car likely to be broken into?
stolen or written off?
Choosing a policy
Car insurance policies are based
on either 'agreed' or 'market' value.
An agreed value policy has a set dol-
lar value for your vehicle. Market
value policies value your car based on
the make, model and condition. The
agreed value is usually higher than the
When you purchase a car insur-
ance policy you will agree to pay a
premium, that is, a regular amount that
covers the cost of the insurance, and
you will agree to an excess, which is
the initial amount you will have to
pay if you make a claim on the policy.
Weigh up the difference between hav-
Additional types of car insurance
CTP insurance only covers inju-
ries or death to other people in
Third party property insurance,
which covers damage to other
people's property (their car or
home) and your own legal costs;
Third party, fire and theft insur-
ance, which covers damage to
other people's property, and
provides limited cover for damage
to your own car caused by theft
Comprehensive insurance, which
covers damage to your own car
and other people's property if
your car is in an accident (includ-
ing fire) as well as theft.
WHAT YOU ARE
KEEP IT SAFE: Assess the risks. Make certain your pride and joy doesn't
become valueless scrap metal.
Photo: SGT Andrew Hetherington
ing a high premium and low excess
versus paying a lower premium and
having to pay a higher excess if you
have an accident.
Make sure you understand the level
of cover before signing up. All insur-
ance policies come with 'exclusions'.
Exclusions are things not covered by
your policy. Typical car insurance
exclusions to watch out for include:
Damage from mechanical failure,
modifications, depreciation, rust
and wear and tear;
Lost wages if you can't drive;
Damage caused because your car
was unsafe or in a race;
Damage caused if the driver was
unlicensed, drunk or under the
influence of drugs;
The driver wasn't covered by the
LAC Smith gets into debt
LAC Smith decided not to get any
extra car insurance on top of his CTP
because his car was old. A few months
later, he hit a new sports car, which
needed $10,000 worth of repairs.
Because he was not insured for
damage to other cars and without
access to such a huge amount of cash,
LAC Smith had to take out an expen-
sive personal loan to pay off the debt
over three years.
Drivers under 25
The cost of insurance is determined
by the level of risk your insurer is tak-
As more young drivers are involved
in accidents than older drivers, most
insurance companies charge a higher
premium for drivers under 25.
It pays to be extra vigilant with
checking the details and doing all
the appropriate paperwork and back
checks before buying any vehicle.
It's wise to go to your state or ter-
ritory roads and traffic authority for
helpful information on what you need
to do when buying a car. It's also very
important to call your insurer before
you buy to find out everything they
need to know about the car in order to
If you're not covered when you
drive away having just bought your
new vehicle and you're involved in a
crash, even if it's not your fault, you
could end up with an expensive debt
and no vehicle.
Visit ASIC's consumer and investor
website, FIDO at www.fido.gov.au or call
1300 300 630. E-mail ASIC with topics
that interest you via ADFcolumn@asic.
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