Buying a car is an exciting time, but it’s also important to remember to get insurance when you purchase your vehicle. Not having insurance is irresponsible. If you cause an accident and damage someone else’s car, home or belongings, you will be paying thousands of dollars out of your pocket if you’re uninsured.
By law, you’re required to have compulsory third party insurance. This particular type of insurance is required to register your vehicle. Keep in mind that compulsory third party insurance generally only provides cover for people who have sustained injuries as a result of an accident that you have caused. Driving without CTP is a serious offence. Driving without CTP can lead to:
- a fine up to $5,000
- points on your license
- driving privileges taken away
(see http://www.lawstuff.org.au/nsw_law/topics/cars-and-driving/insurance for more info)
In addition to compulsory third party insurance, it’s recommended that you add additional coverage to your policy.
Photo by http://www.flickr.com/photos/barteverts
The types of insurance you can add include:
Third party property insurance – This type of insurance covers damage to other people’s property for which you are liable and your own legal costs. Keep in mind, this type of insurance generally does not cover you for damage to your own vehicle.
Third party, fire and theft insurance – This type of insurance covers damage to other people’s property, and provides limited coverage for damage to your own car caused by theft or fire.
Comprehensive insurance – This type of insurance covers damage to your own car caused by accidents, fire and theft as well as covering damage you cause to other people’s property. If you have this insurance and are in an accident, you only have to deal with your insurance company to get your car repaired no matter who is at fault.
What happens if you choose not to buy any additional coverage? Read the story below to see what could happen if you don’t have your car properly insured.
A driver that goes by the name of Richie thought his compulsory third party insurance was enough, so he decided not to buy any additional coverage. Plus, his vehicle was old and he figured it would have been a waste of money. One day Richie crashed his old car into a brand new sports car. The sports car needed about $20,000 worth of repairs. Because Richie’s policy didn’t cover the damage to the other car, he had to take out an expensive loan. In order to pay off the loan, which took about 5 years, he had to work extra hours.
Without purchasing the right car insurance, you are putting a lot at risk. So many things can happen to your car and you want to make sure you’re always covered. For example, your car could get stolen, a family member or friend could drive and crash it, or you could even crash it yourself.
You should always shop around for insurance before buying a car. There are many companies that offer a variety of policies, so be sure to ask family and friends for their recommendations. Exploring the internet is a great way to do a car insurance comparison. The internet allows you to get online quotes, special deals, and compare car insurance rates and policies quickly.
If you don’t have car insurance, what are you waiting for? Go and get it now! You may think you’re saving money, but if something happens, you may end up paying money for the damages for many, many years. After all, you don’t want to face the same financial burden that Richie faced, do you? I didn’t think so!
Plus, having car insurance also gives you great peace of mind while you’re driving, and who doesn’t love having that feeling?
