Third Party or Comprehensive Insurance

Which One is Right for You?

Oct 27, 2007

Third party liability insurance against injuring other people is compulsory in all Australian states. Victoria includes compulsory third-party insurance in the costs of registering your car, while other states like New South Wales allow you to shop around and acquire third- party policies yourself. The third-party policies that will be discussed in this article are third party property damage policies -- policies that cover damage done by to other cars and or property by your vehicle. Comprehensive policies cover not only the other car / property damaged in the accident, but also the costs of replacing or repairing your car if it is damaged.

We suggest that you purchase at least third party insurance to cover yourself in the event of an accident involving another car or property. Do you really want to, or can you afford, to pay to have a brand new BMW, Porsche, or Rolls Royce repaired? You also have to consider damage to other property. For example, if your car runs out of control and damages someone’s house or even another person. Please note that third-party property (also called extended third party) insurance will not pay to repair/replace your car as it will only pay for damages to other person’s property.

Comprehensive car insurance will not only cover you for any damage caused by you but will also cover your own car for repairs or replacement. Insurance also covers the policy holder in the event of theft or fire to your vehicle. Comprehensive

The are a number reasons a person may choose to insure a vehicle for third party property damage only. First, many people consider it as a good alternative for older or inexpensive cars. Sometimes the cost of comprehensive insurance may be almost as much as the value of an older carcar themselves, while they still have the peace of mind of knowing that damages caused to other people’s property will be covered. It’s also a good alternative if budgetary constraints make the cost of comprehensive insurancecar insurance companies do not offer comprehensive car insurance for older, inexpensive vehicles. and people make the choice to risk paying to replace their prohibitive. Finally, some

Comprehensive insurance is an option typically chosen by people who have a substantial financial investment in their cars. Most of us do not have a spare $20,000+ to buy another car in case something happens to our existing car. Comprehensive car insurance is also a compulsory requirement of most, if not all, car finance contracts – the lenders insist that the car is comprehensively insured so that if it is irreparably damaged, lost or stolen, the insurance will cover the amount remaining on the loan. If you’re ever signing a car finance agreement, make sure you read the fine print because If the car is not fully insured, you may breach the agreement.

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