Student Legal Service: Car Insurance

By Student Legal Service:

It’s everyone’s worst nightmare – you are driving to uni, running a little late to your lecture and there is traffic everywhere. You finally make it to the intersection just before uni and you go to turn the corner and out of nowhere you hear that awful sound of screeching tires and metal crushing metal. BANG! Your stomach drops and you let out the world’s biggest sigh. You’ve just had a car accident.

You get out of the car to inspect the damage and you notice long scratches on your car and a huge dent on the other car. You think to yourself, “Thank goodness I have insurance, that will surely cover it”. But then the driver of the other car asks you what type of insurance you have, and you pause, you didn’t even realise there was more than one type… “Oh no!” you think to yourself, “This is going to be much more complicated than I first thought.”

Whether or not you can claim on your insurance after a car accident depends on the circumstances of the accident and the type of insurance you have.

There are three types of insurance:

  • Compulsory Third Party (CTP)
  • Third Party Property
  • Comprehensive

 

Compulsory Third Party (CTP) Insurance

CTP insurance, commonly known as the ‘green slip’ is compulsory in Australia. It is against the law to drive a vehicle or motorcycle without CTP and a maximum fine of $5,500 can be issued for this offence.

What CTP covers?

If you caused the accident i.e. are at fault, CTP will cover:

  • Compensation to any person who has been injured or killed in the accident e.g. your passengers, other driver & passengers, pedestrians etc. This ONLY covers injuries and does NOT cover any compensation for property damage to your vehicle or other vehicles.
  • Limited medical expenses and loss of income for the driver at fault.

BE CAREFUL: If you only have CTP insurance and you cause an accident and the vehicles involved are damaged, the owners of those vehicles can commence legal proceedings against you to recover the cost of the repairs needed.

 

Third Party Property Insurance

 Third Party Property Insurance is optional.

 

What Third Party Property Insurance covers?

  • If you were at fault in the accident, the insurance will cover the cost of repairing property damage to other vehicles.

This means, if another driver involved in the accident pursues you for money for repairs, you can make a claim on your insurance company and refer the other driver to your insurer. Your insurance company can then act to settle the claim with the other driver. You will most likely have to pay an excess for this claim but will avoid being sued directly for the repairs.

  • In limited circumstances, if you were not at fault in the accident, the insurance may cover some repairs to damage sustained to your vehicle. To claim this cover, you must be able to provide to the insurance company the name of the at fault driver. You should check directly with your insurer if your policy covers compensation for this type of damage.

If your insurance policy does not cover damage to your vehicle, you can try and recover costs from the person at fault either through their insurance company or by commencing legal proceedings against them as an individual at court. You should seek legal advice from Student Legal Services before commencing any legal proceedings.

 

Comprehensive Car Insurance

Comprehensive insurance is optional.

What Comprehensive car insurance covers?

  • If you were not at fault in the accident, the insurance will cover the cost of repairing the damage to your car and damage to other vehicles.
  • If you were at fault in the accident, the insurance will still cover the cost of repairing the damage to your car and damage to other vehicles. You may be required to pay an excess.
  • BE CAREFUL – your insurance claim could be refused if you were charged with driving under the influence of alcohol or drugs.

Note: The above is general information in regards to types of insurance. Insurance policies may vary and therefore it is necessary to consult the individual policy.

Some FAQs:

  • How do you know whether you were “at fault” in the accident?

Fault is determined by the law, specifically the Road Rules (NSW) 2014. Sometimes it is obvious to determine who was at fault i.e. if you rear-end a car, you will most likely be at fault. Other times, it is more complicated and it can even be that both parties contributed to the accident. If you are unsure, you should seek legal advice from Student Legal Services.

  • Should you always make a claim on your insurance?

This depends on whether or not you have to pay an excess, how much the excess is and how much the repairs are going to cost. If the cost of repairing the damage is similar to the cost of the excess, it may be worth paying directly for the repairs as a claim on insurance can affect your premiums, no-claim bonus or ability to get insurance later on.

If you are confused about how to proceed after a car accident, contact Student Legal Services. You can receive free legal advice from a qualified solicitor about your particular situation.

 

Susannah Coles – Solicitor, Student Legal Services

 

Disclaimer: The information is general and should not be relied on as legal advice.

Should you require advice, contact Student Legal Services on 8688 7875 or email studentlegalservices@westernsydney.edu.au

WSU Student Legal Service is a joint venture between Western Sydney Community Legal Centre and WSU. Located at the Parramatta Community Justice Clinic, Parramatta Local Court, it provides advice to currently enrolled WSU students through SSAF funds.

About WSUP

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2 Responses to Student Legal Service: Car Insurance

  1. Roya August 15, 2016 at 3:48 pm #

    Great article, very insightful !!

  2. Sally September 12, 2016 at 4:42 pm #

    Thanks for this article, it’s clear to understand the differences.

    And love the story at the beginning!

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