What is comprehensive car insurance, and what does it cover?
Expert tips on using your comprehensive car insurance
Our car insurance expert, Adrian Taylor, has these tips for Australians wanting to take out comprehensive car insurance.
Adrian Taylor
Executive General Manager – General Insurance
Review your coverage every year
It’s a good idea that you review your cover at least every 12 months to check that it’s still fits your needs and that you’re not paying too much. By comparing your options when reviewing your cover, you may even find a new policy on the market that better suits you.
Always read your PDS carefully
Always read the PDS to determine what you are and, more crucially, what you are not insured for. This can help avoid unpleasant surprises if you need to file a claim.
Consider optional extras
Including optional extras in your car insurance package can be a benefit because they give specialised coverage for certain incidents and hazards that the standard policy may not cover.
What is comprehensive car insurance?
Comprehensive car insurance is a type of cover that insures Australians against damage to their vehicle or other people’s property. It’s the highest level of cover you can take out for a car, covering both damage to your vehicle and your legal liability for damage your car causes to another driver’s vehicle or property when an accident occurs. For example, comprehensive car insurance includes coverage for damage caused by natural disasters (like hail), accidental damage from accidents and will reimburse the sum insured if your car is damaged or stolen.
Comprehensive car insurance products are often more expensive than other types of car insurance in Australia, such as third-party car insurance, but they offer broader coverage and peace of mind. Comprehensive car insurance is different from Compulsory Third-Party (CTP) insurance, which is mandatory for every registered vehicle in Australia, whereas comprehensive car insurance is an optional cover.
What does comprehensive car insurance cover?
Comprehensive car insurance generally covers a wide range of incidents and insured events, providing financial protection for various scenarios, including:
- Accidental damage: You’re covered for the repair or replacement costs up to the sum insured if your car is damaged in a car accident, regardless of who is at fault.
- Theft: You may be covered if your car is stolen, or damaged from an attempted theft.
- Vandalism and malicious damage: You’re covered for damage caused by vandalism.
- Natural events: Coverage for damages caused by natural disasters such as fires, floods, storms, hail and earthquakes.
- Third-party damages: You’re covered for your legal liability for damages you cause to other people’s property (such as their vehicle or a fence) in an accident that’s your fault.
- Personal effects cover: Cover the damage or theft of personal belongings inside the car (depending on your policy).
- Towing costs: If your car needs to be towed after a car accident or breakdown, you may be covered for the reasonable cost of towing.
- New car replacement: You may receive a new vehicle of the same make and model as your car if it’s written off as a total loss, subject to meeting terms and conditions.
As well as the standard coverage included in your policy, your comprehensive car insurance may also offer optional extras, including:
- Reduced or no excess on windscreen damage. With this extra, you may get a reduced or even waived excess on car insurance claims for repairing or replacing damaged windscreen glass and car window glass.
- Accident hire car cover. You can get a replacement vehicle at a reasonable cost for the duration of your car’s repair or replacement period.
- Choice of repairer. You can choose the vehicle repairer you want to repair your car, rather than using the insurer’s agreed repairer.
- Roadside assistance. You can be covered for the cost of getting help to get your vehicle going again in the case of a breakdown.
Keep in mind that every insurer’s comprehensive car insurance policy can be different and often customisable. Reading the relevant Product Disclosure Statement (PDS) can ensure that you understand the coverage you’ll receive and your policy’s specific terms, conditions and exclusions. You can also read the Target Market Determination (TMD) to understand if the product suits you.
What does comprehensive car insurance not cover?
Like any type of insurance, comprehensive car insurance does not cover every scenario. These limitations are called exclusions and can usually be found in the finer details of your PDS. Understand the standard exclusions of your policy so you’re not taken unawares should you need to make a car insurance claim.
Typical exclusions usually found in comprehensive car insurance policies include:
- Unnamed drivers: You might not be covered if the person driving during the car accident isn’t a named driver in your Certificate of Insurance.
- Driving an unroadworthy car: You won’t be covered for an incident if your vehicle is deemed unroadworthy (e.g. defective brakes/lights or worn tyres).
- Damage caused under the influence: Damages as a result of a car accident where you were under the influence of alcohol or drugs are excluded.
- Intentional damage to your vehicle: You won’t be covered if your insurer determines the damage was intentional or due to fraudulent activities.
Reading your insurance policy in detail is crucial to understanding the exclusions and conditions. Every policy can have different terms and coverage, so understanding the full details and being aware of what is and isn’t covered can help you know when to make a car insurance claim.
More information on comprehensive car insurance
What’s the difference between comprehensive car insurance and other types of car insurance in Australia?
The key difference between comprehensive car insurance and other car insurance, such as CTP insurance and third-party insurance, is the scope of coverage, cost and peace of mind.
For instance, comprehensive car insurance covers both your vehicle and any third party property you may damage in a car accident that’s your fault, plus a more comprehensive range of incidents like theft, fire and natural disasters. On the other hand, third-party insurances (like Third Party Property Damage and Third Party Fire and Theft) only cover the damages your car causes to other people’s property, and cover for your own car under these policies is very limited.
As such, comprehensive car insurance is more expensive than other car insurance levels due to its broader coverage. However, comprehensive insurance can offer peace of mind for the higher price with its more extensive coverage; third-party car insurance is typically more suited to those who only need basic coverage and can manage the risk of damage to their vehicle.
How do I choose between comprehensive car insurance and other insurance types?
Choosing between the different car insurance options depends on your needs, budget and the level of risk you can accept.
You may like to compare your car insurance options to weigh up costs, benefits and cover to help you in your decision.
Do I need CTP insurance if I have comprehensive car insurance?
Compulsory Third Party (CTP) insurance, commonly known as a Green Slip in NSW, is required for all registered vehicles across Australia. If you or anybody driving your car injures or kills someone in an accident, CTP insurance can cover your liability for their medical expenses and any compensation they’re entitled to. Property damages (including those to your and anyone else’s vehicle) are not covered by CTP.
This is where comprehensive car insurance can help, as it covers damage to your insured car and damage to other vehicles or property caused by the usage of your vehicle. It also covers repairs to your car for damage caused by unexpected events such as collision, fire, theft or weather.
How much does comprehensive car insurance cost?
Several factors can affect your car insurance premium, including vehicle type, market value, driver’s details, location where you live and park, car usage, coverage level, and excess amount. You’ll need to pay your car insurance premiums either fortnightly, monthly or annually to maintain your cover for the period of insurance.
If you want an idea of how much your comprehensive car insurance may cost, you can get a car insurance quote from our comparison service.
How can I save on my comprehensive car insurance?
You may be able to lower your car insurance premium by choosing a higher excess within the insurer’s range when taking out your policy. This means that you may get a lower insurance premium, but keep in mind that you’ll have to pay a more considerable out-of-pocket cost in the event of a car insurance claim.
Some other ways you may be able to save on your premium can include:
- Paying your insurance premium annually instead of monthly
- Adjusting your annual kilometres driven if you don’t drive very much
- Parking in a secure location (like a garage) instead of the street
- Restricting younger drivers from driving your car
- Installing security features such as dashcams and car alarms in your car.
What is an insurance excess?
The excess is the amount you agree to pay out of pocket when you claim on your comprehensive car insurance policy. This is considered your contribution to the claim costs, and the insurer covers the remaining amount.
There are several types of excess that can be applied to your car insurance claim, depending on the policy that you have chosen. These can include a basic excess, age/inexperience driver excess, unlisted driver excess and other additional excesses.
To confirm the excesses applicable to you, check your PDS and your Certificate of Insurance for complete details.
Can I drive another car with comprehensive car insurance?
When driving another person’s car, always check the insurance policy details of the car owner to confirm if you’re covered. Your own comprehensive car insurance does not insure you when driving someone else’s car; it’ll only cover your own car.
What is total loss, and does comprehensive car insurance cover it?
A total loss occurs when the car is destroyed, lost or damaged to the extent that it cannot be repaired or recovered. While comprehensive insurance can cover the total loss of a vehicle, the value of your payout for a total loss will depend on your insurer and the terms and conditions of your policy. For example, your policy or insurance certificate may outline whether you’ll be paid out the agreed value or the market value of your vehicle in the event of a total loss.
Meet our car insurance expert, Adrian Taylor
As Executive General Manager of General Insurance at Compare the Market, Adrian Taylor is passionate about demystifying car insurance for consumers, so they have a better understanding of what they’re covered for. Adrian’s goal is to make more information available from more insurers, to make it easier to compare and save.