It’s scary, inconvenient, and – worst of all – expensive. If your injuries are minor, be thankful. However, the injuries to your car and finances can hurt just as bad if not worse, especially if you chose an insurance policy that wasn’t a good fit for your driving needs. When you do go to make your claim, it can feel like yet another heavy blow you didn’t see coming.
Far too many people focus on monthly cost when purchasing car insurance which leaves them heavily underinsured as a result. It’s natural to want to save as much money as you can wherever you can. However, skimping on your insurance coverage may save you dollars now, but could cost you thousands, in the long run, as many people will tell you from experience. You cannot foresee what happens down the road (pun intended!), but you can prepare for it in the best way you can.
There are some important factors to consider in order to avoid additional pain and trauma during the claims process. These factors must be considered from the very beginning when you first take out your insurance policy.
Deciding Which Type of Insurance is Best for You
When choosing the best policy for your needs, the premium or monthly price should not be the main factor. You must understand your own risk – how you will be using your car, where you will be driving it, how far, and the condition of the vehicle, among other things. Many insurance companies offer a wide range of coverages so it is best to shop around and compare different car insurance coverage options.
Compulsory Third Party (CTP) –
Insurance is the minimal coverage you can get for your vehicle and it is also the minimum coverage required by law for all registered vehicles in each state and territory. This type of coverage safeguards any people injured while you are driving, including other drivers, cyclists, and pedestrians. While the least costly in the short term, it leaves you and many other circumstances grossly uncovered. Any damage to your vehicle and other people’s vehicles is not covered and you could still be held legally liable for cases not involving personal injury. Moreover, any theft of your vehicle and/or its contents is not covered under this policy. Also, if you are at fault, only the third parties’ injuries, not your own injuries, are covered in some areas of Australia.
You should only opt for this coverage of your vehicle is not in good condition or good state of repair. Otherwise, you risk serious potential loss personally and financially, often up to millions of dollars.
In contrast, comprehensive insurance is highly recommended and offers optimal coverage for you and your vehicle. In addition to the compulsory third party coverage, almost all damage to your vehicle and others’ vehicles is covered for repair or replacement. Weather damage, as well as theft or malicious damage, is also covered. Many insurance companies offer several types of comprehensive policies with inclusions and optional extras, so you want to comparison shop for coverage that is the best fit for you.
Once you have decided on the best policy for you, don’t sign on that dotted line just yet. First, read the Product Disclosure Statement (PDS) which explains the terms and conditions of the policy you chose. Insurance companies are required to supply this document to you by law. If you have any questions, ask your insurance agent before signing anything so that you have a clear understanding of your coverage.
If Your Claim is Rejected
Countless vehicle insurance claims are rejected every year. Usually, it stems from inadequate coverage from CTP insurance. However, your claim can also be rejected, regardless of which policy you hold, due to the following:
- Benefits – People commonly assume they are covered for something when they are not. Again, make sure that you have read and understood the terms and conditions of your PDS.
- Exclusions – There are certain circumstances where your policy will not compensate you. These include driving under the influence and general reckless or negligent driving. Other exclusions may apply if an accident occurs within a certain distance of your home, or beyond a certain amount.
- Your responsibility – If you try to settle damages with other parties or if you get unauthorized repairs to your vehicle, your claim could be denied.
Additionally, in cases of theft, your policy may not cover items that can easily be removed and stolen. This refers to any valuables left in plain sight in your vehicle. If you have to leave anything such as your laptop or mobile phone in your car, keep them out of sight in order to discourage theft.
If You Have an Accident
If the unthinkable happens, first and foremost, remain calm. If possible, move any damaged vehicles off the road. For life-threatening injuries, immediately call 000. Gather as much information as possible from other drivers and witnesses. For this purpose, it is advisable to carry some printed and pre-filled insurance forms to give out. In addition, take pictures and videos of the scene and any damage. The more information you can give to your insurer, the more quickly your claim can be processed and you will receive the adequate compensation you are entitled to.
In conclusion, you must keep in mind that no one can foresee the future. The best you can do is hope for the best and prepare for the worst. Make sure that your insurance coverage helps you to do exactly that.