Car insurance in Victoria

A comprehensive car insurance policy is the highest level of car insurance, covering you for financial loss or damage to your car from insured events like theft, fires, storms, floods, malicious acts and accidental damage. A comprehensive policy can also cover the damage you cause to someone else’s vehicle or property following an accident.

Third Party Fire and Theft covers you for damage you cause to other people’s cars or other people’s property, as well as for loss or damage to your car from fire or theft. Some insurers may also offer conditional cover for your own vehicle where you’re not at fault in an accident and the other driver isn’t insured.

Third Party Property Damage (TPPD) covers the expenses of another person’s damaged property or vehicle when you’re at fault for an accident. It can sometimes provide a limited amount of cover for your own car’s loss or damage as a result of the accident. However, this depends on certain requirements being fulfilled (e.g. if the at-fault driver isn’t insured).

Compulsory Third Party (CTP) insurance covers passengers, other drivers, road users and pedestrians for death or injuries caused by an accident that is caused by your vehicle. CTP doesn’t cover the damage you cause to cars or property, including your own. It’s a minimum insurance requirement across Australia and is provided by Victoria’s government-owned Transport Accident Commission (TAC) and paid through the transport accident charge in your car registration fees to VicRoads.

CTP insurance is a requirement for all Victorian drivers when they first register their car or renew their registration. However, an additional level of cover is always a good idea to help protect your own car; it just depends on which type suits your needs.

Your significant investment shouldn’t go to waste after one accident (especially if it’s a brand-new car), so here’s a comparison of car insurance options to consider.

Always read the relevant Product Disclosure Statement (PDS) for specific exclusions and conditions to the cover. You should also read over the Target Market Determination (TMD) to help you decide whether this product is suitable for you.

Your car insurance premium is in part affected by the state or territory you live in; for example, whether your home is in a floodplain or bushfire zone or if your neighbourhood has a high rate of car thefts. However, it can also be affected by where you park, like whether your car is secured safely in a garage or parked on the street.

Victoria has one of the highest rates of car thefts in Australia. In 2022, there were 12,000 vehicle thefts reported to the Victorian Police, according to the Australian Bureau of Statistics.¹ That’s 2,000 more reported cases than 2021. In the 12 months to March 2023, a further 17.9% increase in stolen vehicles was recorded by Victorian Police records.²

Victorians with comprehensive car insurance or a Third Party Fire and Theft policy can be covered against car theft, plus any malicious damage caused by an attempted theft.

In Victoria, having at least CTP insurance is required by law. However, having a level of car insurance beyond that is still a smart idea. Mishaps can strike at any time while you’re on the roads, so it’s best to have some level of cover to protect your car.

The cost of car insurance will change for each driver, because your premiums are calculated using a variety of factors that are usually unique to you. Some of these factors include:

• Your car’s model, age and kilometres driven each year
• Your address in Victoria and claims history
• Where you park your car at night
• The level of car insurance and any optional extras you add

The cost of your car insurance is a bit more complicated than just whether you live in Melbourne or out in the Victorian bushland. That said, the postcode you live in does play a part in how much your insurance will cost.

For example, perhaps your regional Victorian town has safe roads but a high rate of motor vehicle thefts. Or your inner-city suburban home is safe from thieves and your car is garaged at night, but you live near a busy intersection that has lots of crashes. Taking out a new policy for either situation might cost a bit more than somewhere with low rates of theft and accidents, regardless of where it is in the state.

Of course, Melbourne is also well-known for its natural weather events, sometimes in the extreme. A slew of hailstorms can drive up claims and, therefore premium rates in your area, which can play a very real part in why insurance costs can vary across Victoria.

Just like anywhere else in Australia, your car insurance premiums will depend on several factors. The reason for this is because your unique situation will be different to other drivers, and so your car insurance costs are calculated to reflect that.

Some details that are used to determine your premium include:

• Your type of car. Generally, common makes and models would cost less to insure (as they’re cheaper to fix or replace), whereas high-end, classic or sports cars are typically the opposite.
• How old you are. Your age can affect how much you pay for premiums, as younger drivers generally have a higher risk of being in car accidents. Most insurers offer cheaper premiums for drivers over 30, while some may still have more affordable premiums for drivers over 25 years of age.
• Your location. Where you live in Victoria can contribute to your risk of making a car insurance claim. Sometimes, living in the city may come with higher car theft rates or a higher likelihood of having an accident (e.g. due to busier roads).
• Your type of policy. Your premiums and excess will depend on the kind of policy you choose. Third party car insurance (i.e. TPFT or TPPD) may cost you less, but they also cover you for less and won’t always cover your own car’s damage. On the other hand, comprehensive insurance will cost you more, but you’ll have the peace of mind of knowing you’re covered for most situations.

If you’re looking to lower the cost of your vehicle’s insurance, here are some things to consider (depending on your policy and needs):

• Park securely. Parking in the garage or a secure parking spot overnight can keep the price of insurance down and protect your car from thieves and hail.
• Increase your excess. Choosing a higher excess often lowers premiums. However, the excess is paid when you make a claim, so that’s important to keep in mind – you want to be sure you can afford the additional excess should you need to claim.
• Restrict the age of drivers. Younger drivers are riskier to insure. However, you can place an age restriction on your policy to state that drivers under a certain age will not be operating the insured vehicle. This alone should bring down policy costs.
• Stay safe. While this might sound obvious, it can do wonders for your premium if you stay safe on the road. Many insurers offer a no claims discount if you haven’t claimed within a specific time frame.