Car Insurance for Backpackers in Australia

Understand the types of car insurance cover you may need during your Australian road trip with Savvy's useful guide.

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, updated on February 16th, 2024       

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Car Insurance Banner - Two backpackers eating while sitting in the boot of their car in a forest

Australia is a big country and if you are visiting and planning to travel outside the big cities, public transport may not an option. If you’re planning to do some long-term backpacking and want to explore more than just cities, you might want to get a car. While this will give you the freedom to go wherever you want, whenever you want, it also comes with responsibilities. Before you hit the road, it’s important to ensure your car is insured. But what sort of insurance do you need? We explain all in this informative guide.

Is car insurance compulsory in Australia?

Yes – in Australia, all cars must be covered by Compulsory Third Party (CTP) insurance, known as a Green Slip in New South Wales. CTP insurance is designed to cover personal injury claims arising from car accidents, providing compensation for people who are injured or killed in an accident caused by the driver of the insured vehicle but not damage to vehicles or property. It is illegal to drive on public roads without CTP insurance and failure to have it can have significant financial and legal consequences if you are in an incident.

What other types of car insurance are there in Australia?

CTP insurance provides limited cover for drivers in Australia. If you want more extensive coverage, there are three types of optional car insurance available:

  • Third party property damage (TPPD): covers accidental damage to you cause to other vehicles or property with your car but not any damages to your own vehicle.
  • Third party fire and theft (TPFT): covers everything covered by TPPD insurance, as well as any theft or fire damage.
  • Comprehensive: the highest level of car insurance coverage you can get in Australia, it covers everything the third-party policies cover but also includes cover for incidents such as accidental damage and damage caused by natural disasters.

What car insurance options should backpackers consider?

Every backpacker’s travel plans in Australia differ, so there's no one-size-fits-all policy. However, considering you may spend significant time on the roads, potentially in unfamiliar and remote areas, there are some car insurance policy features you may want to consider:

  • Breakdown cover or roadside assistance: especially if you are driving a used car during your backpacking journey, having breakdown cover or roadside assistance can be invaluable in dealing with engine issues and unexpected emergencies on the road.
  • Bad weather protection: Australia’s weather can be unpredictable, from flooding to hailstorms. Having insurance coverage for such weather events will protect your car from costly damages while travelling.   
  • Contents cover: as backpackers often keep valuable belongings inside their vehicles while on the move, securing contents cover will provide peace of mind in case of theft or damage.
  • Animal collisions: Australia's outback roads are home to various wildlife, and encounters with animals like kangaroos can cause severe damage. Opting for coverage that includes animal collisions can save you from costly repairs.

How do I get car insurance as a backpacker?

Taking out car insurance as a backpacker in Australia should be relatively straightforward. Generally, you will need the following:

  • Australian address: you’ll need to provide your insurer with a main address so they know where your car is usually parked and can calculate your premium.
  • Driver’s licence: you should be able to drive on your full overseas licence as a visitor, though you may need an English translation if it is in another language or alternatively need an International Driver’s Permit. In many Australian states and territories, visiting drivers can drive on their overseas licence indefinitely, bar New Zealanders, who are treated as interstate visitors. Note that in the Northern Territory, you must transfer to an NT licence if you remain in the Territory for more than 3 months, and in Victoria you must convert your licence after 6 months.

How can I save on my backpacker car insurance?

There are several ways you could save on your car insurance premiums as a backpacker:

  • Nominate a driver over 25: if possible, designate someone over 25 years old as the primary driver, as insurers often consider them to be safer drivers, leading to lower premiums.
  • Customise your coverage: choose policies that allow you to exclude unnecessary extras like trailer cover and only include essential features, helping you save on premiums.
  • Consider car make and model: insurers assess car makes and models differently, so shop around for a safe yet affordable car, as this can lead to reduced insurance costs.
  • Shop around: compare different insurance providers to find the best coverage for your backpacking journey. 

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Car Insurance Banner - Two backpackers eating while sitting in the boot of their car in a forest

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