GUIDES & RESOURCES

Types of Car Insurance

Keep reading to learn more about some of the different Car Insurance products that might be available to you, and what they typically cover.
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What are the different types of Car Insurance?

Below are the four main types of Car Insurance, as well as a breakdown of what’s typically covered by each policy.

Car Insurance type

Damage to your car

Damage to another person’s car or property

Damage or loss caused by theft

Injuries or death to others in an accident

CTP

No

No

No

Yes

Third party property

No

Yes

No

No (but covered by CTP)

Third party fire and theft

No

Yes

Yes

No (but covered by CTP)

Comprehensive

Yes

Yes

Yes

No (but covered by CTP)

This table gives you a broad outline of what each policy covers, from Compulsory Third Party (green slip in NSW) through to Comprehensive cover. Compulsory Third Party is generally included in your registration fee, but it would be wise to pay for more cover than that. Comprehensive cover provides the highest level of protection, but can also come with a higher price tag. We’ll go into more detail on each cover, below.

What is Comprehensive Car Insurance?

Moneysmart defines Comprehensive Car Insurance simply as ‘Cover that provides the policy holder with broad protection. For example, Comprehensive Car Insurance can help cover loss or damage to your car and damage you may accidentally cause to other people’s property.’

In more detail, Comprehensive Car Insurance can cover you for accidental damage to other people’s property and vehicles, as well as damage to your vehicle, even if you’re at fault.

Comprehensive policies often give you a range of options for things like hire cars while your car is being repaired and windscreen replacement, and you may also have the choice of insuring for ‘market value’ or ‘agreed value’. Exact cover and the optional extras available vary between insurers, so it’s worth checking these before you take out a policy.

Similarly, there will be exclusions to your cover. Often, drivers may not automatically be covered unless they are listed on your policy. Where drivers do not meet the insurer’s underwriting criteria they also may not be covered. Damage caused while driving drunk or under the influence of drugs won’t be insured. Again, check before you take out a policy and know what you’re covered for.

What is Third Party Fire and Theft (TPF&T) Car Insurance?

Third Party Fire and Theft helps cover accidental damage to other people’s property or vehicles where you are at fault. It also covers loss or damage caused to your vehicle or property by fire or theft.

What is Third Party Property (TPP) Car Insurance?

TPP Car Insurance is the same as TPF&T without the cover for loss or damage to your car through fire and theft. So, it covers any accidental damage you cause to another person’s property in a car accident which is your fault. TPP insurance is generally the cheapest Car Insurance option available.

TPP can help cover you whether you smash into a third-hand rust bucket or a brand-new Aston Martin. Again, you’ll have to check with your individual insurer to make sure that you’re covered for what you want.

What is CTP or Green Slip Car Insurance?

CTP, or ‘green slip’ in NSW, is the compulsory third party insurance that is sometimes included in your vehicle registration costs, depending on your State. It will only insure you against costs relating to injuries or deaths of other people, caused by you in an at fault accident. This includes other drivers, passengers, pedestrians, motorcyclists etc. Basically, anybody who isn’t you, who is injured or killed in an accident caused by your driving.

But CTP does NOT cover any damage to any vehicle, and that’s why it’s worth considering taking out further insurance. Otherwise, in an accident, it could be you picking up a huge repair bill.

CTP cover varies between states, so see the relevant links below for more detailed CTP/Green Slip information for your state.

What is an excess and can it save me money?

Insurance excess is the amount you may have to pay towards the costs, if you make a claim. So, if your excess is $500, then you will have to pay that amount towards any repairs or replacement and the insurance company make up the difference in an eligible claim.

Generally, an excess is payable where you are at fault, or the cost is not recoverable from the at fault party.

There are two main types of excess:

  • Basic excess: This will be shown on your insurance certificate. It’s the minimum amount you’ll be expected to pay in the event of a claim.
  • Additional excesses: These can differ by insurer and policy, but in certain circumstances you may be required to pay an additional excess in cases where, for example, the driver was a certain age, how long the driver had held an Australian license for, and whether the driver was listed on your insurance certificate.

What’s the difference between agreed value and market value?

If your car is written-off, you can either be paid an agreed value or market value, depending on the choice you made when you took the policy out.

  • Agreed value is a fixed payment of an amount agreed by you and the insurer when you initially take out the policy.
  • Market value is based on the market value of the car at the time of a claim. It takes into account a variety of factors including the car’s make, model, age, kilometres and condition.

Many insurers will allow you to choose between a ‘market value’ and an‘ agreed value’, but typically ‘agreed value’ policies will be more expensive. Check with your insurer for specific details, costs and options.

Can I tailor my Car Insurance policy to suit me?

Every insurer has their own range of optional extras which you may wish to add to your policy. There are also certain things you can do to help tailor the cost of the policy to your budget.

Popular optional extras offered

Not all extras are offered by all insurers, so it pays to check your individual policy options. Here are some popular extras which you can choose to pay extra for:

  • Temporary hire-car while your car is being replaced after theft or repaired after an accident
  • Windscreen excess reduction. Windscreens can be a lot more expensive than you think, this option could help reduce the cost you pay in the event of a windscreen claim.
  • Roadside assistance. If you don’t have a separate roadside assistance policy, this option can help you get back on the road following a breakdown.
  • Personal effects cover to help you pay for items in your car that are lost, stolen or damaged.

Ask your insurance provider what optional extras they offer before you take out a policy.

Choices that can reduce your premium

These choices and discounts vary between insurers, so it’s wise to ask what’s available and how you can save. Some popular options are:

  • Raise your excess: An additional voluntary excess could reduce your premium.
  • Drivers age restriction: If you restrict drivers of your car to be over a certain age you may save money.
  • Pay as you drive: Some insurers offer a discount if you restrict the amount of kilometres you drive.
  • No claims discount: This isn’t so much an option, but it’s something you earn over the years of not submitting any claims. It can add up to a valuable money saver off your premium.
  • Buy online: Purchasing your policy online can sometimes reduce your premium. With iSelect you can compare policies online and select the one which suits you, and still enjoy the benefit of a ‘buy online discount’ that you’d get with some of our providers if you bought from them directly.

Compare, select and save on Car Insurance, with iSelect.

So, are you ready to get insured? Before you do that, here are iSelect’s top tips for buying Car Insurance:

  1. Establish what coverage you require
  2. Compare coverage quotes
  3. Understand the benefits of Car Insurance
  4. Know your vehicle and your driving history
  5. Determine how much you can afford
  6. Review insurance company credentials
  7. Review the fine print of your policy
  8. Find out how to lower your premium
  9. Review your Car Insurance policy at regular intervals

It’s not that hard to get suitable protection for you and your family, especially when you use iSelect’s Car Insurance comparison service.* We compare policies, helping you see what premiums, options and benefits each policy offers

It should save you time and could even help you save money. Compare policies online from our range of providers, or call our friendly team on 13 19 20.

Last updated: 08/02/2022

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