fbpx

Third Party vs Comprehensive Car Insurance

Learn the differences between third party and comprehensive car insurance and how to choose the best policy for you in Savvy’s useful guide.

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on February 16th, 2024       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Car Insurance Banner - Young couple smiling while driving through the countryside

Car insurance is essential to protect your and your vehicle when on the road. In Australia, there are two main types of optional car insurance available: third party and comprehensive. Each offers distinct coverage and benefits, and understanding their differences can help you make an informed decision that suits your needs and budget.

In this informative guide, Savvy takes you through the different types of car insurance, weighing up their pros and cons to help you find insurance cover to suit your needs.

What does third party car insurance cover?

Third party car insurance is the most basic form of car insurance. In Australia, there are two tiers of third party cover: third party property damage (TPPD) and third party fire and theft (TPFT). TPPD provides cover for damage you cause to another person’s vehicle or property with your car, while TPFT also covers damage to your own car through fire or theft.

Pros:

  • Cost-effective: third party car insurance is generally more affordable than comprehensive insurance, making it an attractive option for budget-conscious drivers.
  • Suitable for less-valuable cars: if you have an older, lower-value car, you might not need more extensive cover.
  • Liability coverage: third party insurance provides essential liability coverage, protecting you from financial burdens in case you cause an accident that results in damage to someone else’s property or vehicle.

Cons:

  • Limited coverage: third party insurance offers minimal protection and does not cover your own vehicle against accidents or, in the case of TPPD, theft or fire damage.
  • Out-of-pocket expenses: if your vehicle sustains damage due to an accident where you are at fault, you will be responsible for your car’s repair or replacement costs.

What does comprehensive car insurance cover?

Comprehensive car insurance provides a more extensive level of coverage compared to third party insurance. It not only covers damage to other people’s property but also protects your vehicle against accidents, theft, fire and other insured events.

Pros:

  • All-round protection: comprehensive car insurance safeguards your vehicle and financial interests by covering a wide range of risks, from collisions to hailstorms.
  • Additional benefits: most comprehensive policies offer extra benefits like roadside assistance, new-for-old car replacement and coverage for personal belongings inside the vehicle.
  • Peace of mind: you can drive confidently knowing that your vehicle is protected in various scenarios, whether it's an accident, a natural disaster or theft.

Cons:

  • Higher premiums: comprehensive insurance typically has higher premiums than third party insurance due to its broader coverage and added benefits.
  • Potentially unnecessary coverage: some policyholders may find that they don’t need or use all the coverage offered by comprehensive insurance, making it less cost-effective for their specific needs.

Which type of car insurance is best for me?

Whether to choose third party or comprehensive car insurance depends on various factors, including your budget, the value of your car and your risk tolerance.

Reasons to choose third party car insurance include:

  • You are on a tight budget and your vehicle is older or has a lower market value.
  • You are willing to bear the costs of repairing your own vehicle.
  • You primarily want protection against damaging someone else’s property or vehicle in case of an accident.

Reasons to choose comprehensive car insurance include:

  • You own a new or expensive car that requires protection against a variety of risks, including accidents, theft and natural disasters.
  • You want to ensure that your vehicle is covered in a wide range of situations, minimising out-of-pocket expenses.
  • You would like additional benefits like roadside assistance, new-for-old car replacement and coverage for personal belongings inside the vehicle.  

Ultimately, you should take into account your unique circumstances to make an informed choice that best suits your priorities and needs and offers you peace of mind when behind the wheel.

Helpful guides on car insurance

Car Insurance Banner - Young couple smiling in a meeting with a car insurance broker

Car Insurance Brokers

Find out what car insurance brokers are and how they work, then compare car insurance offers online. Compare car insurance...

Car Insurance Banner - Smiling young woman giving her friend a lift after buying car insurance.

How Much is Car Insurance?

Find out about what influences car insurance premiums and how you could keep costs down. Car insurance is an important...

Car Insurance Banner - Happy young couple driving around in an open-top vehicle.

Any Driver Car Insurance

Find out whether you can take out cover for any driver on your car insurance policy with Savvy. Wondering whether...

Car Insurance Banner - Front view of a blue car which has been written off in an accident.

Car Insurance for Write-Offs

Learn about what to do when your car is written off and the insurance claim process in Savvy’s comprehensive guide....

Compare car insurance policies with Compare the Market

Savvy is partnered with Compare the Market to help you compare a range of car insurance policies from a panel of trusted providers.

Explore car insurance options by make

Select your car make and find out how much it may cost to insure, read helpful guides and compare quotes.

Disclaimer:

Savvy (ABN 78 660 493 194, ACR 541 339) provides readers with a variety of car insurance policies to compare. Savvy earns a commission from our partnered insurers each time a customer buys a car insurance policy via our website. All purchases are conducted via our partners’ websites. The integrity of our comparison service is unaffected by our partnerships with those businesses and our effort remains to bring further brands that do not already use our comparison service onboard.

Savvy’s comparison service includes selected products from a panel of trusted insurers and does not compare all products in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy. We always recommend readers to consult the Product Disclosure Statement (PDS) of different policies before purchasing your car insurance.

Car Insurance Banner - Young couple smiling while driving through the countryside

We'd love to chat, how can we help?

By clicking "Submit", you agree to be contacted by a Savvy Agency Owner and to receive communications from Savvy which you can unsubscribe from at any time. Read our Privacy Policy.