Car insurance protects you and the people you share the roads with against injury to person and damage to property.
Compulsory third party car insurance policies cover medical costs and any punitive damages that a person may seek to recover from you when you cause an accident. This particular insurance policy is a requirement for registering a car, and is typically known as a Green Slip.
There is also third party property insurance, which will cover the damage you cause to other people’s property when you are at fault in a car accident. This kind of insurance is not compulsory but is highly recommended. If you rear end another car, you could be liable for thousands of dollars in damages.
If you wish to insure your own vehicle from theft or fire, there are specific car insurance policies that will cover these two scenarios. Typically, this is know as theft and fire car insurance and will only replace your car if it is lost to fire or to theft. It is typically, a cheaper policy and the premiums will be dependent on where you live, what you drive and where your car is usually parked.
Comprehensive car insurance will cover the cost of fixing or replacing your car in most scenarios. Most often this will be when your car is damaged in a car accident for which you are at fault. No one is a perfect driver, and mistakes do happen. However, if you are in an accident and are found to be under the influence of drugs or alcohol, more often than not your policy will not be paid out. Car insurance policies will generally still pay out if you are at fault, but driving under the influence of drugs or alcohol is considered gross negligence which is considered preventable and therefore not an accident.
Always check the fine print of your car insurance policy, because they do vary between insurers. You should consider what support your insurer will provide for you if your car should be off the road for a period of time. Some providers will give you a loan car, some will reimburse the cost of hiring a car.