The requirement to maintain current comprehensive insurance on your vehicle will depend on the type of finance you have on your vehicle. Read this article to learn more about comprehensive vehicle insurance and which specific types of finance it is generally required for.

What is Comprehensive Insurance?

Comprehensive Vehicle Insurance covers you for damage to your vehicle and damage caused to other vehicles and property in the event of an insurance claim where you are deemed ‘at fault’.

What is the difference between comprehensive insurance and CTP?

Compulsory Third Party Insurance, aka CTP is a compulsory insurance which is usually lumped in with your vehicle registration. In order to have a vehicle registered in Australia, you are required to have CTP. CTP covers damage to people, including medical expenses. Whereas Comprehensive Insurance is generally an optional insurance which covers damage to property, including your vehicle as well as other people’s vehicles and property.

Do I need to have comprehensive insurance?

No, comprehensive insurance is not a mandatory requirement in order to have a vehicle registered on Australian roads. However, there may be some cases under which comprehensive insurance is required for other reasons, such as as a condition of a finance contract.

Do I need to have comprehensive insurance for my finance?

In most cases, yes. If your finance is secured finance, therefore the lender takes security over the vehicle you’re purchasing, then most lenders will require full comprehensive insurance on the vehicle throughout the duration of the finance to protect their interest and the asset. There are some cases however, where this is not a requirement, such as if your vehicle is purchased using a personal loan and there is no encumbrance over your vehicle.

If you’re unsure whether your vehicle will need to have comprehensive insurance for your finance contract, speak to your Loans For U Finance Consultant on 1800 538 287, they’ll be more than happy to answer any and all of your finance questions.

If you have any other questions about finance or purchasing a vehicle, boat, bike, caravan or home, our specialist Finance Consultants are happy to help, simply give us a call on 1800 538 287. Alternatively, you can get an instant and obligation-free quote online 24/7 using our online quick quote system.