The car is likely to be the second biggest purchase any Australian will do in his lifetime. In order to protect this expensive new asset, you need to get it insured. Buying car insurance is an integral part of buying a car. Deciding for auto or car insurance is not an easy task in Australia. For most of the Australians understanding the car insurance details sometimes become very tricky and utterly confusing. This confusion sometimes leads to wrong decisions where they end up spending more money and may be the insurance deal they got actually doesn’t suit their needs.

Not only understanding a few factors related to car insurance can cut down the money you spend in buying a car insurance deal but can also help to get the best quote and value for your money. Insurance is one of those strange expenses that you hate paying for yearly until you actually need it.

Lets simplify the general car insurance facts for you so that you can develop a good understanding of this dreaded but important topic i.e. Car Insurance. Here are some very important facts which every Australian should always consider before applying for any car insurance offer.

Car insurance can be basically divided into four categories.

1. Third party insurance- This is the cheapest and most basic insurance available.
2. Compulsory third party- This insurance is you pay as part of your registration fees. This covers you against any physical damage or injury and medical claims if you are guilty in an accident.
3. Third party, fire and theft- This covers you against damage to somebody else’s vehicle and theft or fire damage for your own car.
4. Comprehensive insurance. This covers you for damage to another person’s vehicle or property as well as damage and theft of your own car. Comprehensive insurance is usually obligatory if there is any finance on the vehicle.

So, it all sounds fairly simple now. But all these may vary from company to company as there are over 100 insurance companies claiming to give you the best deals in Australia. So check out what is covered, what are the conditions of repair and replacement, and are there any extra features.  Also, check the differences in premiums which any insurance company is offering from the other. Insurance is generally a case of you get what you pay for.