Types of Car Insurance

Find out more about the different types of car insurance available in Australia and compare quotes online.

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, updated on February 15th, 2024       

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Car Insurance Banner

Car insurance is a crucial part of owning a car, but with so many different types of policies and offers available, it isn’t always easy to know which one is right for you. Understanding the different types of car insurance can help you make an informed decision about the level of coverage you need to protect yourself and your vehicle.

From comprehensive to third party insurance, read more about the options on offer to help you determine which is the best for your needs and budget. If you're ready to buy your policy, you can compare instant online offers today.

What are the different types of car insurance and what do they cover?

There are four main types of car insurance available in Australia, each of which offers different areas of coverage. What they do and don’t cover is as follows:

Does the provider cover you for: Comp. TPFT TPPD CTP
Damage to someone else’s property
Damage to your car due to fire
Damage to your car due to theft
Damage to your car due to weather
✓*
Damage to your car due to accident or collision
Injury or death of someone else in an at-fault accident

*Not all weather-related incidents are covered under a comprehensive car insurance policy. Check your PDS to find out what's covered and what isn't.

It’s important to note that insurers have a range of exclusions which are outlined in your product disclosure statement (PDS), meaning you won’t necessarily be guaranteed coverage when making a claim. As such, it’s important to check your policy documents carefully so you can be aware of what you can and can’t apply for under your car insurance policy.

What is comprehensive car insurance?

Comprehensive car insurance is the highest level of protection you can take out for your vehicle in Australia. It can cover you for damage to your car, as well as damage to other people’s vehicles and property. In addition to collision damage, comprehensive car insurance can also cover damage due to events such as theft, vandalism and extreme weather like hail or floods.

Some policies may also include additional benefits such as rental car coverage, emergency roadside assistance, hire car cover and windscreen replacement. Comprehensive car insurance is typically the most expensive type of car insurance on the market, but provides the most extensive coverage for your vehicle.

What is third party car insurance?

Third party car insurance is a type of car insurance which covers the cost of damage you may cause to someone else's property or vehicle. In Australia, there are two types of third party car insurance cover: third party property damage and third party fire and theft.

Third party property damage (TPPD) insurance can provide coverage for damage you may cause to someone else's property or vehicle in the event of an accident. This type of insurance doesn’t cover any damage to your car, which typically makes it the most affordable optional insurance policy for drivers.

Third party fire and theft (TPFT) insurance, on the other hand, provides coverage for damage to someone else's property or vehicle as well as damage to your own vehicle caused by fire or theft. This type of insurance is generally more expensive than third party property damage insurance, but it offers greater protection (namely for your vehicle).

It's important to note that both types of third party car insurance policies do not cover any damage to your vehicle caused by an accident. If you want coverage for damage to your vehicle, you’ll need to take out a comprehensive car insurance policy.

What is compulsory third party car insurance?

Compulsory third party (CTP) car insurance, also known as green slip insurance, is mandatory in Australia for all registered vehicles. This insurance provides cover for personal injury or death caused by a vehicle's owner or driver to other road users. It doesn’t cover any damage to property or other vehicles, nor does it cover the driver or owner of the vehicle for any injury or damage caused to themselves or their vehicle.

Each Australian state and territory has its own regulations for CTP insurance, and the cost and coverage of CTP insurance can vary depending on the state or territory in which the vehicle is registered. Additionally, you may be able to purchase this either from your state or territory government directly (such as in Victoria) or from a list of approved insurers.

Types of car insurance you can choose from

How to compare car insurance types and policies

Common questions about the types of car insurance in Australia

What is pay-as-you-drive car insurance and how does it work?

Pay-as-you-drive car insurance is a type of car insurance which allows policyholders to pay based on the number of kilometres they drive. This can be a cheaper alternative for low-usage drivers, as they may drive less than the average number of kilometres in a given year. If you drive above this amount, you may be liable to pay a further excess, but many insurers will enable you to increase your coverage before this happens.

What are agreed and market value car insurance policies?

Agreed and market value car insurance policies are different ways of valuing your car for insurance purposes should it be stolen or written off. Agreed value policies allow the policyholder and insurer to agree on a specific value for the car at the start of the policy. In contrast, market value policies see the insurer pay an amount based on the car’s market value at the time of the accident or claim.

Are there specific types of car insurance for seniors?

Some car insurers may offer policies tailored more to seniors, with benefits such as discounts to older drivers possible. It's always worth comparing car insurance policies to find one that best suits your needs and budget.

Can I get car insurance as a P-plater or L-plater?

As a P-plater or L-plater, you can get car insurance, but your premiums may be higher than those of more experienced drivers. Some insurance companies may also have restrictions on the type of car you can insure as a P-plater or L-plater. If you’re a young driver, you may be able to be included under your parents’ car insurance policy.

Can I hold two different types of car insurance at the same time?

It generally isn’t possible to hold two different types of car insurance at the same time for the same vehicle which offer cover in the same area. This means you can have comprehensive car insurance and CTP insurance, but not two different types of third party cover.

Will I be able to add extra drivers to my car insurance policy?

You can add extra drivers to your car insurance policy, but it may affect your premiums. Insurance companies typically take into account the age, driving history and other factors of the additional driver when calculating premiums. It's always best to inform your insurance company of any additional drivers to ensure you have adequate coverage in the event of an accident.

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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.