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Why should I car insurance? The reason is, if you have car insurance, you can drive with the peace of mind. Why should I Car insurance? The car accidents are something so frequent today and any average car driver is likely to meet with an accident in every 17 years. Thus, in case you happen to cause a car accident and injure somebody else, you will have to pay him a large amount of money as compensation, unless you have insured your car for third party liability. When your car is insured for third party liability, your insurer may pay compensation to the third parties who are eligible to make personal injury claims. In third party insurance covers, the car owner or the driver can be considered as the first party or the “principal” and the insurance company is the second party. Any other person, who makes a claim after being injured in an accident caused by the vehicle, is considered as the third party for the insurance purpose. The third party can be any other road user, including a driver or passenger of another vehicle, a motorcyclist, cyclist or even a pedestrian. In almost all Australian States and territories, obtaining third party insurance is mandatory before you drive your car on the road. In South Australia and Western Australia, people over 17 must purchase the third party personal insurance from the Motor Accident Commission when they pay the licence registration fee. In Victoria too purchasing the third party personal insurance is compulsory, but it will be included in the vehicle registration fee as a levy. In New South Wales, every vehicle must have compulsory third party insurance which is often called as CTP insurance for the vehicle to be legal. Driving an uninsured vehicle in New South Wales is illegal. The CTP insurance must be obtained from one of the five licensed insurers. In Queensland also, purchasing compulsory third party insurance is required as an essential step in the vehicle registration process. However, as a general rule third party insurance will not cover any damage caused to the vehicle in the accident or as a result of any other incidents, such as fire, theft or natural hazards which damage the vehicle. To get compensation for such damages the vehicle owner must purchase a separate insurance cover from his preferred insurer or upgrade the third party insurance he has already bought.
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