Car insurance: What exactly is it? how do you use it?

If you’ve recently bought the vehicle of your dreams, you could be searching to find car insurance. With the variety of cover options available and a variety of options, it can be difficult to determine what kind of coverage you require. Did you realize that the condition of your vehicle and the how you use it will influence your rates? If you’re not sure where to begin take a look at our guide that will help you figure out the best car insurance for you.

What is the meaning of car insurance?

Car Insurance is a type of insurance policy that you can purchase to reduce the financial burden if you’re involved in an auto accident. It is possible to insure your vehicle to guard it from damages in the event of accidents, loss or damage to someone else’s vehicle.

What is the process of car insurance?

Based on the kind of car insurance that you purchase, certain policies can help pay for expenses such as repairs resulting from an accident, damages to the property of others as well as fire and theft and much more. This is how it works:

You purchase an Car Insurance policy that offers the same level of protection through an insurance company (like Woolworths Insurance). You are required to pay a fee to the company on an annual or monthly basis.

You (the owner of the policy) are now covered for your car, according to the benefits you have listed in the policy.

If you’re injured in an accident or an incident which is covered within the period of coverage it is possible for a claim in order to cover the costs of repairs or damages.

  • In the event that your claim gets accepted then you might be required to pay a set amount towards the expense of replacement or repair – this is known as an “excess.’
  • You’ll only be covered by the provider during the period of 12 months. Insurers might provide you with a renewal at the end of your policy, which may involve an alteration to your coverage or the value of your car, and the cost of your insurance.

Do you think car insurance is worth it?

Insurance can help you out in the event of an incident that occurs unexpectedly. If you’re on your way to work and accidently hit someone else’s vehicle and cause damage, you may be required to pay large amounts of dollars to repair the damage in the event that you’re not insured.

The Compulsory Third Party Car Insurance (CTP) > is mandatory personal injury insurance that you must have and anyone else injured in an accident. It is unlawful to drive in a vehicle without the Compulsory Third Party Insurance. Other forms of insurance for cars include:


Third Party Property, Fire & Theft

Third Party Property Damage

Every type of car insurance provides various benefits, limitations exclusions, levels of protection. The factors that determine the kind that you are covered by Car Insurance and level of coverage you could require are:

  • The vehicle’s age
  • What is it used for?
  • Any financial obligation on it
  • How often do you drive it?

Analyzing these elements will give you a better understanding of which type of insurance for cars is the most appropriate for you.

Woolworths Insurance also offers Drive Less Pay Less coverage which is designed specifically for vehicles driven by less than 15,000km each year. It provides all advantages that come with Comprehensive insurance, however your only paying for distance you intend to drive.

It is important to go over the Car Insurance Product Disclosure Statement, and then consider it’s Target Market Determination to decide which insurance options are best for you.

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