Types of Car Insurance

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Updated 08/03/2024
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Updated table, refined different types and how Car Insurance works in Australia, including information on CTP authorities
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Written by

Mel Basta

Updated 08/03/2024

What changed?

Updated table, refined different types and how Car Insurance works in Australia, including information on CTP authorities
Our aim is to help you make better informed decisions. That’s why iSelect’s content is produced in accordance with our fact-checking and editorial guidelines.

Find out more about how we make money.

View our Privacy Policy.

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What are the different types of Car Insurance?
How does Car Insurance work in Australia?
Where can I compare different Car Insurance?

What are the different types of Car Insurance? 

Putting aside the quirks of different Car Insurance Providers and Policies, comparing Car Insurance in Australia comes down to four categories with varying levels of cover.  

Car Insurance type Damage to your car, including accidents, fires, floods and storms Damage to someone else’s car or property Damage or loss from theft or attempted theft of your car Injuries to or death of others 
Compulsory Third Party (CTP) No No No Yes 
Third Party Property (TPP) No Yes No No (but covered by your CTP) 
Third Party Fire and Theft (TPF&T) Loss or damage from fire only Yes Yes No (but covered by your CTP) 
Comprehensive Yes Yes Yes No (but covered by your CTP) 

Compulsory Third Party (CTP) 

Regardless of what other cover you choose (or don’t choose), you’ll need to have CTP Car Insurance if you want to drive in Australia. It’s a legal requirement. With it, you’ll be covered for compensation claims if you injure or kill someone while driving, like loss of income, costs of medical treatments or funeral expenses. Depending on where you live, you may not be able to claim compensation if you’re at fault. As if you needed another reason to drive safely though. 

Handily, if you’ve registered your car in your state or territory, chances are you’ve already got CTP — unless you live in NSW. You’ll need to do a bit of extra legwork to get your CTP (otherwise known as Green Slip Car Insurance). This is because there’s a different CTP authority in each state and territory and NSW’s State Insurance Regulatory Authority is the only one who doesn’t slip your CTP Insurance into your rego. You can visit the site of your state or territory’s authority by clicking on your location on the map below.

Third Party Property (TPP) 

Crashing into someone’s car is the adult equivalent of chucking a footy through your neighbour’s window. Luckily, if you have TPP Car Insurance, you won’t have to call your parents to come sort it out.  

With TPP, you’re covered for damage you do to other people’s cars or property while driving. Whether you crash into a brand-new Jag or the family station wagon, TPP could help you cover the costs.  

If you want to dive into specifics though, you might need to check out the Product Disclosure Statement (PDS) for your chosen TPP Car Insurance Policy. 

Third Party Fire and Theft (TPF&T) 

Building on TPP, a TPF&T Car Insurance Policy adds limited cover for your car this time. Typically, it’s only if your car is damaged or lost due to theft or fire though, not for when you have an accident. Depending on your policy, there may be limits or exclusions to this kind of cover. So, it could be worth double-checking the PDS just in case to see exactly what’s up. 

Comprehensive Car Insurance 

While it’s unlikely to cover you for everything under the sun, Comprehensive Car Insurance is where you’re going to find the broadest level of protection. From handling the costs of damages to third party property to getting your car fixed up again after an accident, it could come in handy in a lot of situations. 

As with other types of Car Insurance, the PDS will outline the specifics of the policy for you. This can include cover for getting your hands on a hire car or allowing you to pick your own mechanic for repairs. 

How does Car Insurance work in Australia? 

While there are a few different types of Car Insurance in Australia, luckily, they all have some things in common. 

Premiums 

Premiums are the amount you pay regularly for your Car Insurance. They’re decided based on a range of factors like your age, the car you drive, where you live and your driving (and claiming) history. With a higher level of cover you can typically expect your premium to go up. You could look at lowering your premium though by changing your level of cover or upping your excess. 

Excesses 

An excess is how much you pay out of pocket before your Car Insurance kicks in on a claim. If you have a $500 excess on a Comprehensive Policy, for instance, you’d need to pay $500 towards getting your car repaired after a crash, then your Car Insurance Provider would pay the rest.  

Sometimes you might have to pay two kinds of excess: basic and additional. Basic is the usual excess you’d pay, while additional excess might apply under certain conditions, like if your car was being driven by someone under 21 or who wasn’t listed on your policy when they had an accident. Further, sometimes you might not need to pay any excess at all, but this is usually if it was a no-fault accident. 

Agreed value and market value 

If your car is ever written-off, your Insurance Provider needs to know what it was worth in order to pay out the policy (assuming you have that kind of cover). This could either be the agreed value or market value of your car.  

Market value is what your car is worth at the time of the claim. To figure it out, your insurer will consider factors like its make, model, age, kilometres driven, and its condition. Agreed value, on the other hand, is a fixed price agreed upon between you and your Insurance Provider at the time you took out the policy.  

Embracing your individuality is a great way to find your own unique personal sense of style; however, following the crowd might be a better idea when it comes to extras on your Car Insurance.  

Popular extras include: 

  • A temporary hire car if your car is being repaired after an accident 
  • Window excess reduction to help reduce the strain on your wallet if you need to claim for a replacement windscreen or window 
  • Roadside assistance so you don’t need a separate policy for getting you back on the road if your car breaks down 

Different Insurance Providers will offer a range of extras that could get you more value out of your policy. At the same time, though, they may drive up your premium. Therefore, you might like to think carefully about which are must-haves for you rather than nice-to-haves.  

Where can I compare different Car Insurance? 

If you’re ready to take a Car Insurance Policy for a spin, iSelect is here to help. We make comparing a range of policies from different providers easy. All you need to do is use our online comparison tool or give our comparison experts a call on 13 19 20

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