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What Does Car Insurance Not Cover?
What Does Car Insurance Not Cover?
Written by
Kervin Mathew
Edited by
Ellie Garran
Reviewed by
Adrian BennettCompare car insurance policies the easy way
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Why should I know what my car insurance doesn’t cover?
Long story short
Your car insurance won’t cover everyday wear and tear
Brake pads, busted fuses, or engine failure? Unfortunately, that’s on your tab, not your insurer’s.
The PDS is your car insurance policy cheat sheet
It’s not exactly a page turner, but it goes into the details of what’s covered and what’s not.
Unlawful use of your car can get you on the car insurance naughty list
Unlicensed driving, dodgy mods, or racing for glory? Your insurer might deny your claim or cancel your policy.
Using your car for work could land you in hot water
Rideshare, deliveries, or renting it out? If it’s not in your policy, it’s probably a no-go.
Why should I know what my car insurance doesn’t cover?
To prepare for unexpected expenses
If you assume something’s covered under your policy and it turns out it isn’t, you’d be in for a surprise if your claim is rejected. Being aware of car insurance exclusions can help you avoid disappointment and plan for any potential out-of-pocket expenses.
To help ensure you’re covered
Car insurance only works if you keep up your end of the bargain. Making sure your car’s roadworthy and not using it illegally are some of your policy’s conditions. If these aren’t met, you might not be covered.
To try and get a better policy
If you like to be savvy with picking car insurance, you probably have a checklist of what you want. Knowing what’s not included in a policy can help you weigh up your options and steer you away from policies that don’t have everything you’re looking for.
Helpful tip
Sifting through multiple policies to find the one that ticks all the boxes can be a task. That’s why it helps to use a comparison service like iSelect to compare car insurance. Our car insurance comparison tool was used more than 370,000 times in 2024–25 – it’s safe to say, Aussies know how to get value for money when it comes to buying car insurance!1Based on iSelect car insurance comparisons, July 2024 – June 2025
Adrian Bennett
General Manager for General Insurance
What are car insurance exclusions?
Exclusions are instances where car insurance cannot cover you. These could even be circumstances or actions that can void your car insurance policy. If you make a claim for something excluded from your policy, it’s likely your claim will be rejected.
For example, car insurance doesn’t include cover for brake pads that have worn out over time, a blown fuse, or engine failure. Similarly, if you have an accident while under the influence of alcohol or drugs, you won’t be covered.
What are some common car insurance exclusions?
Here’s a (not exhaustive) list of events or situations that might result in claims being denied.
- Wear and tear, neglect, and vehicle breakdowns
- Driving under the influence of alcohol or drugs
- Driving without a valid licence (this is illegal and can void your car insurance)
- Driving a car that’s unregistered or not roadworthy
- Modifying your car and not telling your insurer, or driving with illegal modifications
- Reckless driving, illegal racing, or using your car for motorsports
- Damage to your car when it’s driven by a restricted driver
- Using your car for ridesharing, deliveries, or renting out your vehicle without notifying your insurer
- Driving with more than the legal limit of passengers for your car
- Carrying or towing loads, such as caravans, that are too heavy for your vehicle
Your policy’s product disclosure statement (PDS) has everything you need to know about what isn’t covered in its list of ‘general exclusions’. Or if an event or condition isn’t mentioned at all in the PDS (under either inclusions or exclusions), it’s safe to assume that it’s not covered.
Do exclusions differ based on the type of car insurance I have?
There are general car insurance exclusions that apply to any car insurance policy you’ll find. But different types of car insurance have different levels of coverage – by default, third-party insurance policies don’t cover as many things as a comprehensive policy.
Comprehensive car insurance
This offers the broadest and highest level of cover but can still have exclusions, which are largely the same across most policies.
Third-party property, fire, and theft
This doesn’t cover your own car except if it’s damaged by fire or is stolen, or, under some policies, if an uninsured driver damages your car in an accident (a cover limit might apply).
Third-party property only
This doesn’t cover damage to your car, but it might offer limited coverage if you’re involved in an accident where the at-fault driver is uninsured.
Compulsory third-party
Unlike a typical car insurance policy, compulsory third-party (CTP) insurance doesn’t cover any kind of accidental damage; rather, it’s meant to cover your liability for bodily injury or death caused by your car. In other words, it’s meant for people, not property.
Why is it important to read the PDS before buying car insurance?
Your product disclosure statement (PDS) is a tell-all document that gives you all the ins and outs of your car insurance policy. It can help you make an informed decision about buying car insurance.
A PDS can have juicy info on topics like:
- what is and isn’t covered by your policy
- what your insurer considers when assessing risk and how that affects your premium
- all other additional excesses that could apply
- how costs and fees like your premiums work
- what could happen after you make a claim
- optional extras like choice or repairer and windscreen excess cover that you can add to your policy.
- time limits on claims
The PDS also houses legal must-knows such as what happens when you misrepresent or fail to disclose vital information – heads up, it’s not good!
Where do I start comparing car insurance policies?
Easy! With iSelect, you can cut through the noise and narrow down your search. Use our car insurance comparison tool to compare policies side by side. If you’re happy with a particular policy, you can sign up for one in minutes, and you won’t pay a cent more for it than what you’d pay the insurer directly.
Get started on comparing car insurance policies!
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