Car insurance in Australia

Comprehensive car insurance covers you in more circumstances than other types of car insurance. With a comprehensive car insurance policy, accidental damage to your own car as well as your liability for damage to any other driver’s vehicle is covered regardless of who’s at fault for the accident that caused it. It also covers other types of damage to your car such as vandalism, theft, fires and hail damage.

While Third Party Fire and Theft (TPFT) insurance policies typically don’t cover you for repair costs to your own vehicle if you’re at fault, they cover damage and repair costs for other vehicles you hit (or property you damage). They offer cover for repairs if your car is stolen or damaged by fire or theft.

Unlike TPFT insurance policies, Third Party Property Damage (TPPD) insurance will usually only cover you for the damage you’ve caused to other people’s property, be it their vehicle or something else. Some insurers may offer limited cover for your car in a not-at-fault accident with an uninsured driver.

Every vehicle driven in Australia requires Compulsory Third Party (CTP) insurance, known as Green Slip insurance in NSW or the Transport Accident Charge in some states. CTP insurance covers your liability if a driver or pedestrian is injured or killed by your vehicle on the road. It’s typically paid for when register your vehicle.

Drivers are constantly surprised with unexpected road hazards and weather events when out on the roads and even at home. To ensure your vehicle is protected in more circumstances, it’s essential that you take out the right level of insurance for your current needs.

When making your decision, consider the following and always check the PDS to confirm your cover:

• Theft. Even with modern anti-theft devices, cars can still get stolen, leaving you without a ride and a hefty cost to replace it. Some types of car insurance can help you get back on the roads by potentially replacing or paying out the value of a stolen car.
• Traffic accidents. Your car can be damaged in a collision, or you could be liable for damages to other cars. Having car insurance can help cover your legal liability in these situations, and with comprehensive car insurance, you’ll be covered for damage to your own vehicle.
• Storms and natural disasters. Severe storms may be a fact of life in Australia, but that doesn’t mean you can’t do something to manage the effects of it. Comprehensive car insurance policies can cover you for the cost of damage and losses caused by storm water, falling trees, cyclones, flooding and hail damage.
• Fire. Whether it’s caused by arson or natural in origin, a fire can leave your car a smoking wreck. TPFT and comprehensive car insurance can have you covered.
• Breakdowns. A car breakdown can be a very stressful experience. Fortunately, some car insurance providers may offer roadside assistance, emergency accommodation and even a hire car to help you get moving again in an emergency. Keep in mind these covers may be optional extras that cost more to add to your policy.

The only form of insurance required for all drivers on Australian roads is CTP insurance to cover your legal liability for deaths or injuries caused by your registered vehicle. But even though the other types of car insurance aren’t compulsory, it’s still a wise idea to take out an additional level of cover for your car besides CTP insurance.

While your postcode can influence your car insurance premium, your level of coverage won’t change depending on where you live in Australia. The only difference between the states and territories is in how CTP insurance is paid for and taken out. For example, the states and territories may have differing government charges and levies that can be included in your CTP insurance fees.

Furthermore, drivers in NSW must take out CTP/Green Slip insurance separate to registering their car, while in Tasmania, your CTP insurance is provided by the Motor Accidents Insurance Board (MAIB). It’s a ‘no fault’ scheme covered by registration fees, regardless of who is at fault in a car accident.

We always recommend you choose policies that suit your needs, not just your budget. When looking for a policy, ask yourself questions like:

• Do I need cover for damage to my own vehicle?
• Does the age restriction on the policy cater for other drivers who may use my car?
• What exclusions are listed in the policy?

There’s a lot to consider, so it’s important to be aware of the policy inclusions and options before you consider the costs.

A choice between agreed value and market value when insuring your car is one of the more common car insurance options providers offer. If you want to insure your vehicle for an agreed value (as opposed to the market value, which can change over time) you and your insurance provider will agree to a set value before taking out a policy. This way, you know what to expect in the event you are paid out if your car is a total loss. Some insurers may have qualifying criteria that must be satisfied before you are offered an agreed value policy (e.g. you must hold comprehensive cover).

If you have a no claim discount (a discount for not making an insurance claim within a set period), you may be able to keep it when switching to a different provider. This discount may also be known as a safe driver rating or no claim bonus depending on the insurer, so remember that when looking to switch.

If you want to extend the cover for your vehicle, many Australian car insurance providers will offer you optional extras to give you further peace of mind by providing you with broader cover. Some common optional extras can include:

• Hire car cover. Your insurance provider can set you up with a hire car to keep you moving after an accident while your car is being repaired or replaced.
• Window glass protection. While windscreen damage as a result of a car accident may be automatically covered in your comprehensive policy, incidental chips or cracks sustained can be covered as an optional extra.
• Roadside assistance. Unless you’re a deft hand at fixing your own vehicle with only the tools in your car, roadside assistance can be a handy purchase. It may be bought separately as a standalone product or as an extra with your car insurance policy.

Regardless of which level of cover you have, your car insurance policy may cover learner drivers. With some insurers, you might need to list them on your policy to avoid paying an unlisted driver excess on top of a young driver excess and the basic excess.

Comprehensive car insurance policies typically include cover for towing after an accident.

While the other types of car insurance products generally don’t, there may sometimes be a provision for towing if you can prove that you weren’t at fault.

Some car insurance providers do give you a choice of repairer, typically when you have comprehensive cover. Not all insurance providers offer this in their list of policy benefits and inclusions.

Generally, comprehensive car insurance is the only type of cover that can include a brand-new replacement vehicle if your car is a total loss. There are conditions to this benefit, though, typically it’s for a new car which is only a few years old and you’re the first owner.