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What is Comprehensive Car Insurance?
What is Comprehensive Car Insurance?
Written by
Kervin Mathew
Edited by
Ellie Garran
Reviewed by
Adrian BennettCompare car insurance policies the easy way
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What’s comprehensive car insurance?
Long story short
Comprehensive car insurance offers the highest level of cover
It covers accidents, theft, natural disasters, and more – unlike CTP, which only covers injuries.
You get cover for your car and other people’s property, whether you’re at fault or not
Perks like new car replacement and optional extras like choice of repairer and reduced glass excess add flexibility.
Comprehensive beats third-party and CTP for peace of mind
It’s the only policy that covers your car fully, as well as offering extras for added protection.
You can save on premiums with smart choices and good driving habits
Paying annually, choosing a higher excess, restricting drivers, and keeping a clean driving record could all help lower your premiums.
What’s comprehensive car insurance?
Comprehensive car insurance is the highest level of cover you can get for your car. If you want a policy that covers a wide range of risks including accidents, theft, natural disasters, and malicious damage – the whole shebang – comprehensive car insurance is the way to go.
A typical comprehensive policy might be worth having for a variety of situations, including getting a tow after an accident, replacing your keys, and replacing personal belongings such as child seats. You can even get access to optional extras if you’re looking for cover that’s more niche.
So, you might say that comprehensive car insurance is like the Big Kahuna Burger of car insurance policies, with optional tasty sides. And if you don’t want to risk feeling peckish later, you can ask for the lot!
What does comprehensive car insurance cover?
A standard Australian comprehensive policy covers your car and other people’s property. This is in contrast to third-party car insurance, which mainly covers damage you cause to someone else’s vehicle or property, and compulsory third-party (CTP) insurance, which only covers injuries to people in a car accident.
A comprehensive policy is also the only type of car insurance that can cover property damage or loss whether you’re at fault or not – a feature that might make sense to have in several sticky scenarios.
Here’s what comprehensive insurance covers and how it can give you more of an advantage than lower levels of car insurance.
Accidental damage to vehicles and property
Whether it’s damage that you cause to your own car in an accident, or to another person’s vehicle, bike, house, fence, post box, garden sculpture, you name it, a comprehensive policy can swoop in and help you get back in control of the situation. The cover is capped at a limit, though, such as $20 million for damage to other people’s property.
Theft, attempted theft, or malicious damage
Finding that your car has been stolen or maliciously damaged can be gut-wrenching to say the least. But with comprehensive cover, you can rest easier knowing that your policy covers repair costs if your car is damaged and replacement costs if your car is stolen, or even if someone steals a personal item or baby capsule out of it.
Write-offs due to weather events
Extreme weather is a standard feature of living in Australia. You can never tell when the next flood, hailstorm, or bushfire is about to hit. Thankfully, a comprehensive policy can cover your car, whether it’s for light repairs after taking a few hailstone hits or for replacement after it’s written off in a bushfire.
Agreed value
For a bit of added financial protection in the event of a write-off or theft, comprehensive car insurance might come with the option to cover your car for an agreed value over the policy term. This way, your payout is more certain and won’t depend on the market value of your car at the time of the incident.
Emergency support
A motor accident can potentially leave you in a major pickle, whether your undrivable car is disrupting traffic or your road trip comes to a grinding halt on a state highway. In such cases, a comprehensive policy can cover you for essential repairs, towing costs, and a hire car after a not-at-fault accident, plus emergency accommodation and even damage to your trailer.
New car replacement
If you’ve bought a new car and it becomes a total loss within a certain period or distance travelled, say, two years or 40,000 km, a comprehensive policy might be able to replace it with a new one of the same or similar make and model or compensate you for the loss of your vehicle – like a handy ‘undo’ button!
Choice of optional extras
Comprehensive car insurance has a range of extras, such as reduced window glass excess, which lets you out of paying the standard excess if only your windscreen or window glass is damaged. Another extra is choice of repairer, which can cover repairs done by a trusted mechanic – even one outside the insurer’s repair network.
Be sure to check the relevant product disclosure statement (PDS) and certificate of insurance for any limits, waiting periods, and exclusions that come with your policy.
What does comprehensive car insurance not cover?
As extensive as it might seem, a comprehensive policy does have limitations. Knowing these limitations, or exclusions, can help avoid any surprises in terms of what you’re covered for.
Here are some common exclusions from a comprehensive policy:
- unexplained damage or damage from regular use of your car, tyre wear, breakdowns, or similar
- driving without a valid licence, while under the influence, or refusing a legal test for alcohol or drugs
- accidental damage when an unlisted or age-restricted driver was driving your car
- using your car as a ridesharing or taxi service, for paid driving classes, or to deliver goods
- hiring your car out to other people, racing, or any accident that occurs on a racetrack
- damage or loss due to the car being unsafe to drive, unroadworthy, or overloaded
- any damage, loss, or liability if the car has any modifications that were not approved by the insurer.
There may be other services that aren’t included in car insurance. For instance, roadside assistance is more of a remedy for breakdowns (not accidental loss or damage), so it isn’t typically included. Your PDS will tell you everything you need to know about what’s not covered under your policy. So, grab a cuppa, get comfortable, and put in some serious reading time!
What’s the difference between comprehensive car insurance and other types of cover?
Comprehensive
- covers damage to your car, even if you were at fault
- covers damage you cause to someone else’s vehicle or property
- includes additional features and access to a variety of optional extras.
Third-party, fire, and theft
- covers damage you cause to someone else’s vehicle and property
- covers your own car for fire damage, if it’s stolen, or if it’s damaged by an uninsured driver (within a limit)
- usually includes fewer additional features and optional extras than a comprehensive policy.
Third-party property
- covers damage you cause to someone else’s vehicle and property
- covers your own car (within a limit) only if it’s damaged by an uninsured driver
- usually has no additional features (such as towing) nor optional extras.
Compulsory third-party (CTP)
- mandatory for all registered vehicles
- covers personal injuries in an accident caused by your car
- doesn’t cover property damage.
Is comprehensive car insurance mandatory?
Comprehensive car insurance isn’t mandatory, but it’s the most thorough cover you can get for your car.
The only type of insurance that’s legally required in Australia is CTP insurance, which is either included in your car’s registration or purchased before (or when) you register your car.
That said, one instance where comprehensive car insurance might be required is if you bought your car on finance and comprehensive cover is a condition of your loan.
I already have CTP insurance. Do I need comprehensive car insurance?
CTP insurance, or Green Slip in NSW, only covers injuries to people. It doesn’t cover damage to property, including your or someone else’s car.
But if you need to repair or replace your car after an accident or if it’s stolen (and you don’t want to see your hard-earned money grow wings and fly away!), then yes – comprehensive car insurance can provide the financial safety net you need.
Helpful tip
If you’re in two minds about getting comprehensive cover, it might help to think about how much it would take to repair or replace your car in the event of an at-fault accident – which could potentially run into the tens of thousands – or even if you’d need a hire car until you can get back on your feet. And sure, comprehensive policies aren’t exactly the cheapest, but there are ways to lower your premium without compromising on the benefits. For example, if you don’t drive much, you could get a pay as you drive or low-kilometre policy.
Adrian Bennett
General Manager for General Insurance
How do I choose a comprehensive car insurance policy?
Picking a comprehensive policy can feel like picking out a car itself. You might not need one with automatic seat adjustment, but that single feature can save you a whole heap of drama – ask any single-car couple with a noticeable difference in height! So, it all depends on what works for you and situation.
Here are some features of comprehensive car insurance that might be worth considering before you commit – to a policy, that is!
Now, we’re not saying that getting your head around car insurance is like decoding the Rosetta Stone, but it can get complicated when you get into the details. That’s why it’s a good idea to give the PDS a good read to know what you’re signing up for.
While you’re at it, you could also look at the target market determination, another useful policy document, which provides some generalised facts and figures to help you decide whether or not a policy might be suitable for you.
How can I save on comprehensive car insurance premiums?
Pay your premium annually
Paying your premium up-front, while it can set you back a bit in the near term, can work out cheaper overall than if you pay for your car insurance monthly or fortnightly.
Choose a higher excess
When you buy a policy, you might be given the option to choose an excess. A higher excess typically results in a lower premium. Just make sure it’s an affordable amount if you need to make a claim.
Set driver restrictions
A lot of the risk associated with driving a car depends on the driver. Restricting younger drivers or learner drivers from driving your car can help lower your risk level and might result in lower premiums.
Keep a clean driving record
If you’ve made a few car insurance claims or broken some traffic rules, your insurer might see you as high risk. On the other hand, a clean driving record might do you good in the form of lower premiums.
Park your car in a secure place
If you park in a locked garage or under a carport – as opposed to on the street – you might lower the chances of needing to claim for theft or for damage from, say, moving traffic or extreme weather.
Compare policies regularly
Taking the set-and-forget approach and sticking with one insurer might be convenient. But shopping around regularly can be a potential game-changer if you want to save on car insurance costs.
How do I compare comprehensive car insurance policies?
A good comprehensive policy isn’t hard to find, but finding one that works for you is the real test! Using a comparison tool can help take most of the legwork out of comparing policies. (It definitely beats manually sifting through multiple car insurance quotes or jumping between phones calls with customer service!)
So, whether you drive a brand-new SUV or a well-loved hatchback, a solid comprehensive car insurance policy can be your ticket to saving thousands in the case of an accident, theft, natural disaster, and other insured events.
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