Ins and outs of insurance
What to know
Ins and outs of insurance
What to know
Topics in this section:
Owning a car or buying things like stereos, laptops, cameras etc is a big investment. For a lot of people it is important that these assets are protected from damage and/or theft and so it is always a good idea to look into insurance plans, so that if something happens, you might be able to get some of your money back or your gear replaced.
There are several types of insurance. Many young people mostly think about contents and car insurance.
This covers household contents and personal belongings. When you live in a flat with people you don’t know so well security can get a bit lax… windows left open or unlocked… maybe unfamiliar people visiting? You may not have considered getting insurance for your gear – but it’s a decision that could save you thousands.
Insurance doesn’t just protect you from thieves. It can also cover unpredictable events like a fire, earthquake or flood. Some companies won’t insure individual rooms in flats, so shop around.
The amount you’ll have to pay each year for a policy depends on where you live, your age, the number of people in your flat and how much of your gear you want included in the policy, but expect to pay at least $180 a year. Don’t worry if you can’t pay the full amount up front – most companies have an instalment option.
If you’re under 21 and living in a hall of residence, your may be eligible for limited cover under your parent’s contents insurance. Get your parents to check their policy before you go organising one for yourself.
- Make a list of your possessions – clothes, jewellery, xbox, ipod, electronic gear etc… Make sure you note the serial numbers on your electronic gear and the approximate value of each of your items.
- Keep receipts from large purchases as proof of ownership (computer, stereo etc…). If you’re really keen, take photos of valuable items.
- Ask about a package discount if you already have car, health or life insurance with the insurance company.
- If you have a burglar or smoke alarm, tell them – it will get you a small discount.
Having your own car is awesome, but the expenses like car repairs, warrants, regos and car accidents are not awesome. Unfortunately if you are 25 years and under, car insurance can be expensive, but you’ll probably be really grateful you invested in it after that little “ding” in a carpark.
There are different insurance types that entitle you to different levels of coverage and at the very least you should get third party insurance which will cover the damage to another vehicle should you be found to be in the wrong.
Some factors that will determine how much you will end up paying for insurance are:
- Previous accidents
- Type of license you hold
- Who else will be driving your car
- Are you the only owner of the car
- The type of insurance you want (e.g. third person, third person theft and fire, standard)
- Excess (which is the initial amount that you pay to contribute to the total cost of any claim).
Your personal bank will most likely provide insurance options and there are a number of insurance companies out there. You can have a talk to others about the insurance providers they are with and how much it costs. Make sure you shop around.
If you are unsure of any aspect of what you’re signing up for – just ask, anyone and everyone – it’s better to be fully informed before committing to a policy and avoid possible disappointments when you actually need to use your insurance.
This is the amount you pay each year to have your gear insured. Premiums can be paid annually, or by weekly, fortnightly or monthly installments.
You can sometimes claim a discount for equipment that reduces the risk of damage or loss, such as burglar alarms. Other discounts may be available for people over a certain age and for having other policies (such as health and car insurance) with the same company. Most companies also reward you for being claim-free (no-claims discount).
This is the initial amount that you agree to pay for a claim, and the company will pay out for everything over and above that amount (up to the policy limit). For example, if you have an excess of $300, you will pay the first $300 worth of any damage and the company will pay the rest.
The insurance company will replace a lost or destroyed item with a new one or repair the item so it is ‘as new’. However, items over a certain age may not be replaced, and there is often an upper limit on what you can claim. This is specified in the insurance policy as the ‘sum insured’.
The insurance company will pay an amount based on the item’s age and condition immediately before it was stolen or damaged. It is usually equivalent to the amount you would pay for the item second-hand.