Car Insurance FAQs
Please note that these are a general explanation of the meaning of terms used in relation to car insurance. Your insurance provider may use different wording and you should read the terms and conditions of your policy carefully to understand what you are and are not covered for. Refer to the product disclosure statement (PDS) from your provider.
What is Account-keeping fee / Ongoing fee?
It is a monthly account-keeping fee that is charged by the lender to cover the administration cost of maintaining your car insurance policy. Alternatively, you may be charged an annual fee rather than an ongoing account-keeping fee.
What is Agreed value?
The Agreed Value is the sum for which your car is insured, which has been fixed by agreement between the insurer and the car owner. The option for your sum insured is to insure your car for the market value (see ‘Market value’ below).
What is Comprehensive Car Insurance?
Comprehensive Car Insurance is the highest level of insurance policy, which covers your car for damage to other people, damage to the property of others, damage to your own car if it is damaged or lost because of fire or theft, and accidental damage to your own car, regardless of who caused the damage. Comprehensive car insurance also has a range of optional extras, including complimentary replacement vehicles while you can’t drive your own car, and no-excess windscreen replacement if you have a crash.
What is Compulsory Third Party (CTP) Insurance?
CTP Insurance is a compulsory insurance policy that covers you if you injure or kill someone in a motor vehicle accident. The specific conditions on this type of cover are different from state to state, but it is compulsory to hold CTP in order to register your vehicle.
What is Excess?
The excess is an amount that you pay towards the cost of your claim. Different excesses might apply to different types of claim, so you should check your policy for details. You may be able to pay a lower premium if you have a higher excess, but you need to be sure that you could afford to pay the excess unexpectedly in an emergency.
What are Exclusions with Car Insurance?
Exculsions is anything that is not covered by your policy. Exclusions may vary between providers, but find out the common exclusions here.
What are Inclusions with Car Insurance?
Inclusions is anything that is covered by your policy. When a particular event is listed as being included in your policy, the insurer will cover the whole expense or a listed percentage of the cost involved.
What is Market value?
Market Value is what your car would be worth on the market, or it would cost to replace your vehicle with one of the same make, model, age, and condition as your vehicle was in before the loss or damage. This is one option for your sum insured; the other option is to insure your car for an agreed amount (see ‘Agreed value’ above).
What is a No claim bonus?
A No Claims Bonus is a discount on your premium for drivers who have not made any claims so far on their policy. Some providers have a ‘protected no claim bonus option’, where they will let you keep your no claim bonus after you make your first claim in any one period of insurance, under certain conditions.
What is Nominated driver when it comes to Car Insurance?
When you sign up for insurance, you must advise the insurer who will be listed on your policy as being allowed to drive your car (usually yourself and someone else). These people are the nominated drivers. Other people who drive your car but are not nominated drivers would be required to pay an additional excess if they were in an accident while driving your car.
What is a Premium?
The premium is the amount you pay for the cover your insurance policy provides, and may be paid once annually or more frequently (e.g. monthly, fortnightly). Your premium must be paid on time for your car to remain covered.
What is Third Party Property Insurance?
This is a policy that covers the cost to repair damage caused by your car to other people’s property. It will also cover your legal costs if they sue you over that damage.
What is Third Party, Fire and Theft Insurance?
This is an insurance policy that covers damage to the property of others, and some limited cover for your own car if it is damaged or lost because of fire or theft.