What Is Comprehensive Car Insurance? (A Detailed Guide)
Whether for the daily commute to work or just for taking in some scenery on the weekends, most Aussies have a preferred way of getting around, and that is by car. While many drivers on the road take care when behind the wheel, unfortunately accidents still happen. So, car insurance is a must-have. But, with several car insurance products and many providers to choose from, how do you know which is best for you? To help with peace of mind, comprehensive car insurance is often thought to be your best bet.
In this article, we discuss everything you need to know about this level of cover, including what it is, what it usually covers and what it may not, why it’s important and how it compares to other types of car insurance.
What is comprehensive car insurance?
In a nutshell, comprehensive car insurance is the highest level of car cover available. Comprehensive car insurance, unlike other car insurance policy options, covers damage to or loss of your car and damage you accidentally cause to the vehicle or property of others. Comprehensive insurance typically covers your vehicle for a multitude of instances and incidents, irrespective of who is responsible. This can significantly reduce the out-of-pocket costs you may be subject to should your car be on the receiving end (or delivering end) of damage.
What does comprehensive car insurance cover?
It’s important to note that the specifics of what various comprehensive car insurance policies cover can depend on the insurance provider. Because of this, it’s essential to check out the Product Disclosure Statement to review the inclusions of a policy before committing to it.
Typically, you can expect the average comprehensive car insurance policy to provide compensation payment for repairs (or replacement in cases) in the event of:
- A collision with another vehicle: If you have a car accident that results in your vehicle colliding with another, this type of insurance might assist with the repair costs for your vehicle and any other vehicles damaged as a result of the collision.
- Accidental damage to your car: There are many ways your vehicle may become damaged that do not involve other people or their vehicles, for example, reversing into that ridiculously placed bollard at the shops, or tapping your letterbox negotiating your way down your driveway. A comprehensive car insurance policy may help you with the cost of repairs due to accidentally damaging your own car.
- Weather-related damage: The weather is unpredictable and doesn’t always provide ample warning. Comprehensive car insurance may assist with repair costs for damage to your car caused by natural elements, for example, flooding or a tree falling on your car during a storm.
Some comprehensive car insurance covers may include additional services (usually at a higher fee) to provide you with features such as:
- Glass repairs: Adding this option to your cover generally allows you an annual excess-free window or windscreen replacement.
- Hire car: As some insurance claims may result in you being without a car for some time, there is usually an option to add cover for a hire car to use while your vehicle is undergoing repair.
What doesn’t comprehensive car insurance cover?
As discussed, it’s imperative you consult an insurance policy’s Product Disclosure Statement (PDS) to understand the details of what is and isn’t covered. In most cases, you can expect comprehensive car insurance policies not to cover:
- Avoidable types of loss and damage: While it’s impossible to mitigate certain risks, there are many instances in which loss and damage are avoidable. For example, comprehensive car insurance is unlikely to cover a claim for damage because of putting the wrong fuel in your vehicle, modifying it beyond what is roadworthy, or having it stolen after leaving it roadside, unlocked with the keys in the ignition.
- Manufacturer issues and general wear and tear: Comprehensive insurance policies generally don’t include compensation for general wear and tear, like rust and other age-related deterioration. The same can be said for manufacturing issues, whether they involve the vehicle’s structure, mechanics or electrics.
- Reckless driving or unauthorised drivers: Claims aren’t usually accepted if the driver is unlicensed, was driving recklessly, was under the influence of drugs or alcohol at the time of the incident, or isn’t listed on the insurance policy.
Calculating a comprehensive car insurance premium
Insurance products from varying providers can come with varying premiums. This is because each insurance provider usually has its own method for calculating premiums. There are, however, common factors that providers usually consider. These factors can include:
- your age
- how long you have had your driving licence
- if you’ve made previous insurance claims
- your vehicle’s year, make and model
- where you park your car
- your excess
At KOBA Insurance, we go the extra mile to ensure you don’t pay for the kilometres you’re not doing. We take into consideration how much you drive your car (down to the km) when calculating your insurance premium, too. Neat, huh? You’re not at risk of getting into a driving collision when you’re parked. So, why should the premium you pay, reflect that? At KOBA, we split your premium into two payments; an upfront fixed cost that covers you while you’re parked, and a driving premium that covers you in case of a collision while driving.
Comprehensive insurance vs. third-party insurance
True to its name, comprehensive car insurance protects your out-of-pocket expenses in a range of events that may damage your vehicle or the vehicle or property of someone else. Third-party insurance, however, only compensates for damage you accidentally cause to someone else’s vehicle or property. Then there’s Compulsory Third Party (CTP) insurance, which is commonly confused with third-party insurance but has major differences.
CTP insurance is a requirement for registering a car in Australia. In most states, you get this insurance cover included in your vehicle registration cost. It’s important to note that, unlike third-party and comprehensive insurance, this type of insurance doesn’t cover damage to or loss of vehicles (including your own), nor does it cover damage to property. It only covers yourself and those who drive your vehicle for liabilities associated with the injury of another person because of a car accident.
The key benefits of a comprehensive car insurance policy
To summarise, here are some benefits this type of insurance policy offers:
- It covers your car too
It can be a good idea to consider how you may fare in the event you’re suddenly without your car. How would you get from A to B? Can you afford to purchase a new one? Comprehensive insurance might offer you peace of mind, knowing that your car is also covered for various damage or loss. This is especially true in cases of financed cars, whereby having comprehensive cover may even be a condition of your car loan.
- The cover extends beyond road accidents
Comprehensive car insurance usually has your back beyond being caught up in a bumper to bumper bingle. It may also cover you for a wide range of perils, beyond road accidents.
- You can personalise your cover
A comprehensive policy often allows for add-ons and personalisation to suit your needs. For example, you can opt for a hire car if your car goes in for repairs as part of a claim. This type of insurance policy typically also covers costs associated with required emergency transport and accommodation in case of an accident.
Consider KOBA comprehensive insurance
KOBA is a new kind of car insurance, inspired by the way we currently live, work and play. What’s so special about it, you ask? Well, lots of things! But a fundamental feature is that it allows you to pay for what you use, thanks to our ‘pay per km’ insurance whereby you can pay from 7c per kilometre you drive. If you’re looking for a comprehensive insurance policy, or just want to switch up providers – why not consider something innovative to see if it suits your needs?
Get a quote and join today.
Any advice provided on this site is general advice only and does not take into account your individual needs, objectives or financial situation. Terms, limits, conditions and exclusions apply. Before making a decision, you should carefully read the Product Disclosure Statement & Financial Services Guide (PDS & FSG), and the Target Market Determination (TMD), which are available at kobainsurance.com.au to help you decide if the product is right for you. If you purchase a policy, KOBA receives a commission, which is a percentage of your premium, and may be entitled to a profit share if certain thresholds are met in agreed periods. Please ask us for more details.