Car insurance: check these 7 things in the PDS

Car insurance basics

First, let's overview some of the basics of car insurance. Three common car insurance policies are:

• Compulsory Third Party (CTP) – This is mandatory insurance for road users in each state and territory. It protects any person that you might injure while driving.
• Comprehensive – This policy type will cover damage to both your vehicle and other people’s property.
• Third Party Property – This policy covers damage to other people’s property. It may not cover not damage for your car.

There are at least two key issuing documents to review when buying car insurance. These are:

• A 'Certificate of Insurance' – Sets out the specific details of your insurance. This is a contract between you and your insurance provider.
• A 'Product Disclosure Statement' (PDS) – Tells you what you are (and are not) covered for under your insurance policy, such as insured events, exclusions, benefits and discounts.

As for payments to your insurer, there are two main components:

• Policy premium – This is the amount you’ll pay as part of your insurance policy. While it is often a yearly sum, many insurers offer monthly payments.
• Excess – In the event of an incident, this is the amount you’ll pay in damages before your insurance policy kicks in. Excess can usually be lowered by increasing your premium amount.

With the basics of buying car insurance out of the way, you're now ready to dive into the detail of your car insurance PDS.

What to review in your insurance PDS

1. What each policy covers and their differences

Each car insurance policy will offer varying levels of cover depending on the type of policy you are purchasing, such as comprehensive insurance or third party fire and theft.

The car insurance PDS will outline the features of each policy so you can see what your policy does and doesn’t cover.

For comprehensive insurance, the PDS will outline the options for calculating the insurance cover for your vehicle. This may be the market value of the vehicle or another agreed value that is outlined in your Certificate of Insurance.

2. Excess payable and excess types

Your Certificate of Insurance will show the amount of excess you have to pay in the event of an incident.

The car insurance PDS will describe the various factors that calculate your excess, such as your age, driving and claims history, as well as your insurance premium.

Basic excess will apply to most claims, while additional excess may apply in some situations, depending on the type of vehicle. There may also be age and licence excess as well as listed and unlisted driver excess.

3. Listed and unlisted drivers

Car insurance policies will often require that you to list the drivers who will primarily be using the vehicle. In the event of an incident, the excess you need to pay may change depending on whether or not the driver was a listed or not.

The details of this information can be found in the car insurance PDS and are worth checking if multiple drivers will be using your vehicle.

Note that for unlisted drivers, there may be an age excess if they are under 25 years old. In some cases, if an incident occurs with an unlisted driver under 25, age and license excess amounts will double. However, note this may not apply for learner’s permits.

4. Benefits included in your selected policy

Comprehensive insurance will usually offer additional benefits to the policy holder. If you're buying comprehensive car insurance, it's good to know what you're entitled to. Your PDS should go into detail about the benefits included in your policy and any inclusions or exclusions in relation to the benefits.

Benefits can include cover for personal property in the vehicle, emergency repairs, lost keys and the cost of a new vehicle.

Some insurers also provide optional benefits, which may come at an additional cost and are added on top of your comprehensive policy cover. These may include receiving a hire car after an incident or protecting your ‘no claim’ discount if you have an accident.

5. Cover with vehicle modifications

If your car has modifications – parts and upgrades that are non-standard – then you may want to check the PDS to see how this affects your insurance policy.

Modifications may affect the performance, handling and braking of your car, which may in turn change your premium or excess amounts. In the event of an incident, modifications other than manufacturer’s standard accessories are generally not covered, unless they are in your Certificate of Insurance.

Remember to list any non-standard parts in your vehicle before you take out your policy.

6. Selecting your choice of repairer

Insurance providers will give you the choice of your repairer in the event of an incident. Your car insurance PDS will outline this and may provide more information about their preferred repairer.

Phrases to look out for

Preferred repairer: The insurance provider uses their preferred repairer who they have agreements with surrounding repair costs and guaranteed work volumes.

Choice of repairer: The insurance provider lets you choose which repair service you want after an accident.

Preferred repairers are often the default repairers that the insurer will recommend, and many insurers will heavily insist on going with their preferred repairer. It’s important to note that you do not need to go with the preferred repairer. Always seek out a smash repairer that works for you, first.

Often there is no extra effort for you if you choose not to go with the preferred repairer, as a good repairer will handle insurance claims for you.

7. Available discounts on your premium

Of course, you want to be rewarded for being a customer with your insurance provider and for keeping a good record of incident-free driving.

Insurers will usually offer lower premiums and discounts for their best, safest drivers – sometimes called a ‘no claim’ discount. Check the car insurance PDS for these details. This helps you understand how these discount schemes work and what you may be entitled to after some time with your provider.

Also note some large providers may also offer a ‘multi-policy’ discount if you hold multiple insurance policies, such as home insurance.

Choose a smash repairer that can handle your insurance, too

Buying car insurance is one thing. Claiming it is another. When you need panel beating or smash repairs, go with a repairer you can trust.

Sheen Panel Service has been serving Melbourne motorists since 1969. And with multiple locations across Melbourne, there is one near you. We’ll even sort out the insurance for you, no worries.

See if we work with your insurance provider.

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