Life is unpredictable and not everything goes to plan. When things go wrong, insurance can be a valuable financial safety net for you and your loved ones. But getting the cover that’s right for you will depend on your unique lifestyle and circumstances.
We know that understanding all of the different types of insurance can be daunting. To help, here’s a run-down of the main types of cover.
If you own and drive a vehicle on Australian roads, it’s compulsory to have insurance that covers accidents which result in death or injury to others. Depending on the state or territory in which you live, this may be included in the vehicle’s registration or purchased separately e.g. Compulsory Third Party (CTP) insurance.
Here are some other types of insurance you should consider for your vehicle:
- Comprehensive car insurance – covers damage to other people’s property, plus cover for damage from events like collision, flood, storms, fire and theft.
- Third Party Property, Fire & Theft – covers damage to other people’s property, plus cover for fire and theft.
- Third Party Property damage – covers damage to other people’s property.
Building and contents insurance protects against damage or loss of your property and belongings. If you own your own home, you can bundle these covers together. If you’re renting or live in a strata building, you may want to consider contents insurance.
Private health insurance can cover some hospital and medical costs that aren’t covered by Medicare – including ambulance cover, and extras such as optical and dental. While health insurance isn’t compulsory, if you earn above a certain level of income, you may need to pay the Medicare levy surcharge.
If something happens to you or your partner, this can have a devastating impact on your finances. That’s where life insurance may help. There are different types of life insurance available, depending on your circumstances and needs:
- Life cover (also called death cover) – pays a lump sum benefit if you die or become terminally ill.
- Total and permanent disablement (TPD) cover – pays a lump sum if you’re no longer able to work due to a specified permanent disability.
- Income protection – pays a regular benefit if you’re unable to work because of injury or illness.
- Trauma cover – pays for medical traumas such as heart attack or cancer.
Before you insure
Cover can differ from one insurer to another, so make sure you choose a policy that meets your individual needs. Insurance doesn’t cover everything so it’s important to find out what’s covered and what isn’t. Make sure you also understand the premium costs and any excess you’ll need to pay if you do claim.