Third Party Property Car Insurance

If you’ve just bought a car, you’re probably thinking about finding the right insurance to cover it. Third party property insurance can be a great choice for some, but like all insurance policies, determining the right fit comes down to understand what each policy type covers, and what your needs and circumstances are.

How does Third Party car insurance differ from other policy types?

There are four main types of car insurance policies available in Australia¹. They are:

• Comprehensive
• Third Party Fire & Theft
• Third Party Property
• Compulsory Third Part (CTP)

What does Third Party Property insurance cover?

Unlike CTP insurance, third party property insurance is not compulsory¹. But if you want to an added degree of financial protection, it’s the bare minimum you should consider when insuring your car.

Third party property insurance is usually a cheaper option, as it offers less cover than other policy types. To give you an idea:

• It can cover damage caused by you to another person’s car
• It doesn’t cover damage to your car when you’re at fault
• Some insurers offer a policy extension that partially covers your car when you’re not at fault, and the at-fault person is not insured²

Without third party property insurance, you may be liable for the cost of repairs to another person’s car, which can often be in the thousands of dollars². You may also be liable for any other damage you cause with your car to someone else’s property, i.e. if you crash into a road sign or someone’s fence.

So if you happen to hit a brand new Ferrari or someone’s expensive bike, and you have third party property, you can rest assured that you’ll only need to pay the damage bill for your own car.

Is Third Party Property right for me?

Third party property insurance most often suits someone with a cheaper vehicle, who’s more concerned about affording repairs on someone else’s car than their own³. But if you’ve got a cheaper car, that doesn’t necessarily mean you should give comprehensive insurance a miss.

Ask yourself these key questions to find out if third party property is right for you¹:

1. Is my car at risk of a break in?
2. Do I live in a high crime area?
3. Can I afford repairs on another person’s car?
4. Can I afford paying for any other damage to someone else’s property?
5. Can I afford to repair or replace my own car?
6. If not, can I get around without a car until I can replace it?

If you live in a high crime area and are worried about theft, third party fire and theft insurance may be a better option for you. Likewise, if your car is your livelihood and you can’t afford to replace it, comprehensive insurance may be the best option.

Third party property is usually a good fit if you can afford to repair or replace your car or can manage to get around without it for a while.

How is my premium calculated?

As with all insurance policies, insurers use lots of factors to determine your third party property premium. Knowing and understanding these factors could help you save money, by allowing you to make choices that can positively influence your premiums. Some factors to consider are¹:

• Your age
• Where you live
• Type of car
• Level of excess
• Safe driving record
• Modifications
• Bundling your insurances

Excess

You can also opt for different levels of excess. By choosing a higher excess, you’ll pay more in the case of a claim, but your premium is usually lower¹.

It can be tempting to opt for the highest level of excess to reduce your premium as much as possible, but make sure you can afford the excess payment. Otherwise, you may find yourself in unexpected financial hardship if you have an accident where you’re at-fault.

Safe driving record

A safe driving record may give you a discount on your premium, as insurers often see less risk in insuring you¹. Insurers sometimes offer a no claim bonus, which rewards you for maintaining a claim-free driving history. But this doesn’t always equal a discount on your premium, so it’s worth shopping around.

Modifications

Keeping your car standard by avoiding modifications may help you save money on your insurance – particularly if you’re opting for an uninsured motorist extension on your third party property policy¹.

Bundle your policies

Insurers often reward loyalty, so if you have more than one type of insurance, you may save money by using the same insurer for everything¹.

This can include pet insurance, home and contents insurance, etc. However, you may find that your policy is still more expensive, even after calculating rewards, so it always pays to compare policies.

How to find suitable Third Party car insurance policy

Once you’ve decided on third party property insurance for your car, it’s time to find an insurer that offers the right policy. At iSelect we make it easy to compare policies, including price and inclusions. Compare online, or call us today on 13 19 20.

Sources:
1. https://www.moneysmart.gov.au/insurance/car-insurance
2. https://www.sa.gov.au/topics/driving-and-transport/vehicles-and-registration/vehicle-insurance
3.http://www.rms.nsw.gov.au/geared/your_car/registration_and_insurance/get_covered.html