Best Car Insurance

How to find the best cheap car insurance policy to suit your needs.

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, updated on February 15th, 2024       

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Car Insurance Banner

Finding the right car insurance policy can seem like a challenge given the wealth of options for you to choose from, but it’s actually not as hard as you might think. There are plenty of factors you should look for when comparing the best car insurance deals. We take a deep dive into what makes the best car insurance policy, how you can find and compare them and how you can save, which you can read all about in this comprehensive guide.

What is the best type of car insurance in Australia?

There are four main types of car insurance on offer in Australia. Because Compulsory Third Party (CTP) insurance is mandatory across the country, there are only three that you’ll have to consider when looking for car insurance: Third Party Property Damage (TPPD) insurance, Third Party Fire and Theft (TPFT) insurance and comprehensive car insurance. Let’s break down each type so you can see which is the best for you.

Will this insurance cover you for… CTP TPPD TPFT CCI
Damage to another party’s car or property due to an accident you’re liable for?
Damage to your car due to an accident you’re liable for?
Damage to your car due to a fire?
Damage to/loss of your car due to theft?
Injury/death due to an accident you’re liable for?

CTP insurance

How it works: as mentioned, CTP insurance isn’t really an option you can compare to the other types of car insurance due to being mandatory in nature. It’ll only insure you for an injury or death that may come as a result of a motor accident that you’re held liable for. Any sort of damage to your vehicle or another party’s vehicle or property won’t be covered under this policy. However, depending on the state or territory you live in, you may be partially covered for any injuries you sustain in an at-fault accident.

Where you live will also determine the say that you have in for which insurer to choose. The ACT (four insurers), New South Wales (six), Queensland (four) and South Australia (four) all provide car owners to choose from a list of certified CTP insurers, while everywhere else in Australia pays for a sole government initiative. The cost of CTP insurance is built into your car registration (except in New South Wales, where CTP insurance is known as a Green Slip).

Who it’s best for: every driver with car insurance in Australia, by law.

Third Party Property Damage insurance

How it works: TPPD insurance is the most basic of the optional types of insurance. A policy of this nature will cover you for damage you cause to another party’s vehicle or property which you’re at fault for. It also can cover legal costs that you might be charged if you end up going to court to determine liability of an accident. You won’t be able to make claims for any damage to your car, aside from one exception: some insurers will offer an optional extra called an uninsured motorist extension (UME), which can cover you for up to $5,000 if your car is damaged by an uninsured driver. Of all the optional car insurance policies, TPPD insurance is the cheapest when it comes to premiums as a result of their reduced coverage.

Who it’s best for: drivers who own a low-value car, don’t want to pay expensive premiums and are more concerned about covering expenses they may incur from other parties in a motor accident than their own.

Third Party Fire and Theft insurance

How it works: TPFT insurance is a step up from TPPD insurance in terms of its coverage. This type of policy covers you not only for property damage to a third party in an at-fault accident but also damage to your own car sustained due to a fire or theft, as well as the loss of your car due to theft. Optional extras are generally more accessible in TPFT insurance policies than those of TPPD insurance, with car rental after theft a common feature that’s either covered or offered as an add-on. However, despite covering you for fire damage, some insurers won’t extend this to include other extreme weather like hailstorms or floods. Price-wise, TPFT insurance is also a step up from TPPD thanks to its extended coverage but remains more affordable on a monthly or annual basis than comprehensive car insurance.

Who it’s best for: drivers who own a low-value car and don’t want to pay expensive premiums, but still want to add greater financial protections to their policy. Additionally, drivers who live in areas readily affected by bushfires or crime who deem it a necessary enough requirement to cover for the possibility of damage caused by these.

Comprehensive car insurance

How it works: you need only look at the name to get an idea of the coverage a comprehensive car insurance policy provides. Like TPFT, comprehensive car insurance covers for damage to, or loss of, your car due to fire or theft, but it crucially also covers for damage your own car sustains in an accident for which you’re at fault. This is almost the full package, with one of the few areas not covered in your policy looked after by your CTP insurance. Another major bonus for comprehensive car insurance is that it’s a highly competitive field between insurers, so you’ll probably have greater access to high-quality optional extras on your policy. While premiums are the steepest on the car insurance market, this is the price to pay for the greatest peace of mind when it comes to cover.

Who it’s best for: drivers who want the most comprehensive coverage for their vehicle and are willing to pay a higher premium to do so. Also, drivers who own a new and/or valuable car that they would want to cover so that they can avoid costly fees for damage it sustains.

How do I compare the best car insurance policies?

You’ll be able to find a few different areas for reference when comparing car insurance policies. The following should be at the front of your mind during the car insurance comparison process:

The cost of your premiums

This is probably the simplest way to compare different car insurance policies. Each insurer will set different premiums on their car insurance policies, so it’s up to you to determine which ones are outside of your budget and if there are any that are worth the extra cost for their other features. It’s helpful to review your finances before entering the insurance application process to see what sort of financial commitment you’d be in a position to take on. The cheapest car insurance quotes on offer could save you a substantial amount of money over a relatively short period, as the table below shows.

Monthly premium cost Saving per month ($80 premium) 12-month cost Annual saving ($80 premium)

*Calculations based on estimates. These may not be reflective of premium rates.

The coverage you’ll receive

Different insurers will also provide you with coverage for different areas. As discussed above, this is largely down to the type of insurance you decide to go with. However, some insurers will include features in their coverage that others don’t which you would consider useful. In those cases, something like this could end up deciding the insurer or policy you end up going with. The cheapest car insurance quotes won’t always be the best: always look for coverage in the areas you need it.

The optional extras you’ll have access to

Expanding your coverage to include other important areas not otherwise included in a car insurance policy is something many drivers will look to explore. Because there are still plenty of blind spots for coverage even in comprehensive car insurance, paying that little bit extra on your premium could end up saving you. As such, you might want to go with an insurer who provides you with a wide range of optional extras.

How much they’re willing to cover your car for

You’ll find that, particularly if you’re looking to take out an agreed value car insurance policy, there won’t be a uniform figure across the market when it comes to the value a provider is willing to insure your car for. It’s wise in this situation to shop around to different lenders and compare the cheapest and best car insurance quotes to find the best deal for you.

Any discounts

Some insurers will offer discounts to customers on their car insurance, which could come in handy. Usually, this’ll be a reduction on your first year’s premium of between 10% and 25%. While discounts like these won’t make a huge difference in the context of your entire time with your insurer, they can still save you some handy funds in the short term. What may be more enticing is a no claims discount (NCD) or other similar features which will gradually reduce your premiums if you build up a sustained period without making a claim. These are more common in comprehensive car insurance policies.

Types of car insurance you can choose from

Explained: the best extras for your car insurance policy

Top tips on how to secure the best car insurance deal

Reduce the number of drivers on your policy

Insurance providers believe that, in most cases, the greater the number of drivers at the wheel, the greater the chance for something to go wrong. If you’re the only person that’ll be driving your car, that should increase your likelihood of a good deal. If you do have multiple drivers on your policy, limiting them to only drivers above the age of 25 will have a significant positive impact on your premium.

Buy a car that’s easy to insure

Your premiums will be dependant, in large part, on the type of car you have. If you’re driving a common car manufactured close to or in Australia with a high safety rating, your premiums will be lower than someone with a sports car or one imported from Europe. The reasons for this are twofold: cars made closer to home ensure that parts are easily accessible and cheaper for repairs or replacements, and the safer the car, the less likely to be involved in a crash (in theory).

Increase your excess

Excess is the amount you pay out of pocket when you make a claim to your insurer. You’re able to have some say over how much you contribute, so if you make an additional excess payment your premiums will go down accordingly. This is because your insurer will be paying out a smaller amount if you make a claim, which helps lower your premiums. Ensure that your excess payment will be manageable if you make a claim, though.

Pay your premium annually, rather than monthly

Reducing the frequency of payments for your premium will lower the amount you pay overall. This is due to the administrative costs required to process these payments, so you can see how 12 payments might end up costing you more in fees than one.

Frequently asked questions about the best car insurance

Who are the best car insurance companies in Australia?

There’s no one company that’s better than the rest when it comes to car insurance. Everyone has different needs and wants for their policy, so whoever they believe is the best will depend upon how well they suit their needs. If you’re unsure about where to start, using an online car insurance comparison tool could be the answer. Such tools can help you compare and contrast the best car insurance policies in all the areas that matter the most to you.

Is where I park my car relevant to my car insurance?

Yes – the location of your car park can make a difference to the cost of your premiums. If your car is parked on the road, for example, it'll be considered more vulnerable to theft or an accident than one locked in a garage. Having a car parked securely overnight could help you access cheaper car insurance premiums.

Will I be able to access the best car insurance if I live in an area commonly affected by bushfires?

Probably not – insurers will have a list of areas that are riskier to provide insurance to, with bushfire-affected zones being amongst them. While it certainly won’t discount you from being able to receive a car insurance policy, it’s likely that the premiums you’ll pay are more expensive.

Can I receive the best car insurance cover for my modified vehicle?

Maybe – this’ll depend on what sort of modifications you’ve made. Many mainstream insurers won’t want to touch cars that have been “supercharged”, with features such as a more powerful engine, suspension and tyre alterations generally ruling the car owner out from receiving a policy. In cases like these, a specialist insurer may be your only option. If they’re features to increase the overall safety of your vehicle, like a better alarm system, stabiliser bars or air shock absorbers, the cost of your premiums can be improved.

Does the number of claims I make affect the best car insurance policy I can access?

Yes – generally, the more you claim for at-fault incidents, the higher your premiums will be. Insurers will look carefully at the amount of times you make claims over a 12-month period; if your claim rate is regular, you’ll probably be seen as a riskier driver. It’s prudent, then, to not claim for every single instance of the slightest damage to your car. If it’s just a chip or scratch that won’t cost much, it may be worth paying out of pocket rather than have the claim go against your record.

What’s the best thing for me to do with my car, insurance-wise, if I have a suspended licence?

Keep your car insured – even if you can’t drive it, you should protect it from other damage that it could sustain, like theft, fire or other weather events. At the end of the day, it’s still your car and you’re still going to drive it after your licence is reinstated.

Should I insure my car for market value or an agreed value to get the best car insurance premiums?

If you’re only worried about the cost of premiums, market value is the cheapest option for you. However, you may receive substantially less for your car when you make a claim if you’ve insured for market value instead of agreed value. Market value is a better option for people whose cars aren’t overly valuable and want to focus their finances elsewhere.

What are the cheapest cars to insure?

Common car makes with standard, safe models will tend to attract the lowest premiums on the market. This usually comes in the form of lower-performance cars with smaller engines and models such as station wagons or sedans built for families. Brands like Toyota, Holden and Ford are amongst the cheapest for replacement parts. ANCAP safety ratings also come into play in terms of the cost to insure, with cars like the Toyota Corolla and Mazda 6 earning 5 stars in this metric.

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