How to choose the best car insurance if you are under 25 years of age

Age is an important factor when choosing car insurance. A 20-year-old will probably have different criteria than a 50-year-old. Even people in the same age group may have very different needs. If you are looking for car insurance for under 25, there are a few factors you can consider to make your choice easier.

Types of car insurance

If you want to take out car insurance for the first time, you should be aware of the differences between the types of insurance offered.

Compulsory third party

Every Australian motorist is required to have third party insurance to cover damage caused by third parties. In most states this is compulsory third party liability insurance (TPL), also known as green slip insurance in some states. In the TCA, motor vehicle drivers are required to carry motorist liability insurance (MAI).

CTP and MAI help cover costs associated with damages you cause to others while driving, such as medical expenses and loss of income. For this reason, it is important to purchase additional insurance, such as liability or comprehensive insurance.

CTP insurance is usually included in the price of your registration and does not need to be purchased separately. However, in the following states you will need to purchase your own CTP or MIA insurance before you can register your vehicle:

  • New South Wales
  • South Australia
  • Australian Capital Territory
  • Queensland

Third party property damage

Liability insurance covers damage you cause to another person’s vehicle or property. You can also get up to $5,000 for damage caused to your vehicle by an uninsured driver if you prove you were at fault and provide us with that person’s details:

  • Name
  • Address and
  • Registration details

Fire and theft by a third party

If you take out property damage insurance, you can include fire and theft as additional coverage in your policy. This will cover your expenses:

  • Theft of your vehicle
  • Damage caused by attempted theft, and
  • Fire damage

You can also cover the cost (up to $1,000) of replacing personal property lost or damaged in your vehicle as a result of an insured event. However, there are limitations, such as the fact that loss or damage to tools (e.g., related to your business) is not covered. Please refer to the relevant policy in the product information to find out what your insurance covers.

Comprehensive car insurance

Like third party insurance, comprehensive car insurance covers damage you cause to other people’s cars, but also damage to your own car. It can also contribute to associated costs, such as towing, and gives you access to additional insurance.

Assessment of the types of car insurance for under 25 years of age

  1. Costs: Young drivers often choose basic car insurance, such as liability insurance, because it is cheaper than comprehensive insurance. However, remember that comprehensive insurance also covers accidental damage, theft or collision. If your car is expensive or you plan to resell it, it is worth taking out comprehensive insurance.
  2. Experience: For a young driver, it may be wise to choose basic insurance, but young drivers are also often less experienced. Think about the risk you want to take when taking out car insurance: are you more likely to be involved in an accident that could damage your vehicle or someone else’s if you are less experienced?
  3. Use of vehicles: Consider how often you drive and where you park your vehicle, as these factors can affect your insurance premium.

Factors that can affect your insurance premium.

In addition to where you park your car and how often you drive it, there are other factors that can affect the cost of your insurance and help you choose between different policies.

  1. Driving record: Past offenses, such as speeding or drunk driving, can affect your insurance premium. Some insurers also take attendance at safe driving courses into account when calculating premiums.
  2. Claims history: If you have a claims history, the insurer may classify you as a higher risk driver, which may affect your premium.
  3. Type of vehicle: If you are under the age of 25, there may be restrictions on driving an SUV in the state or territory where you live, especially if it is a Plan P. Even if you are licensed to drive an SUV, the insurer may consider it a risk factor in the event of an accident.

In addition, the insurance company will assess the value of your vehicle, which will affect the amount of your premium.

Start the conversation

The first step in getting the best price and coverage for your situation is to get a quote. We will ask you a few simple questions related to the above to better understand your needs and present you with insurance options.

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