More than half of Aussies don’t know this about their car insurance

A SURVEY has found less than half of Australian drivers actually understand what their car insurance covers — and it could cause some big issues.

WE ALL hand over hundreds for car insurance, but few of us know what we’re actually paying for.

A recently survey has found that most Australians don’t know as much as they think about their insurance policy, and it could cost a lot of money down the track.

The results from new research by Smiths Lawyers revealed just one third of Australian drivers understand what their Green Slip insurance covers them for.

This means that millions of Australians are driving around completely unaware that they won’t be covered for any vehicle or property damaged caused as the result of an accident.

READ: Driver’s copping ‘secret’ green slip tax

Compulsory Third Party Insurance (CTP), also known as a Green Slip, only covers the costs if you injure another person on the road.

But a survey of 1500 motorists found that over 65 per cent of people believe it covers them for both injury to others and damage caused to vehicles or property.

Smith’s Lawyers principal Greg Smith said his firm received calls every year from people who were shocked to find out they weren’t covered for property damage.

“We receive hundreds of inquiries every year from drivers holding CTP only who are not at fault in an accident but have been surprised to find they can’t claim for property damage,” Mr Smith said.

“The problem is worse when both drivers lack property damage insurance as there is no insurer to step in and cover the costs."

The survey found younger drivers were the group most impacted by this misconception, with less than 20 per cent of drivers under 25-years-old able to correctly identify what CTP insurance covers them for.

Out of all the states and territories, NSW had the highest number of drivers who understood that CTP only covers the cost of injury to other drivers.

In order to be covered for damages you need to either have Comprehensive Car Insurance or Third Party Property Damage.

The first covers the cost of repairs to your car and the other car involved, and the second just offers protection for damage to someone else’s car or property.

If you have comprehensive insurance and you get in an accident with an uninsured driver you will most likely be covered for the full damage. But if you only have third party property damage you could be limited in your and fall into an insurance “gap” that could see you out of pocket.

HOW TO MAKE SURE YOU ARE COVERED

• Check your existing car insurance and if you have third party property insurance, check the limit of the cover and whether it includes “uninsured motorists benefit”.
• If you think you’re underinsured, get a quote for comprehensive car insurance to make sure you’re not left out of pocket.
• Educate yourself on your insurance requirements and legal rights.