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.

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, updated on February 16th, 2024       

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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.


  • 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.


  • 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.


  • 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.


  • 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.

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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.

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