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Car insurance protects you against the cost of damages caused by things like car accidents, theft, weather events and other unforeseen events. A car insurance policy helps pay for the cost of these damages to your car, as well as any property you might damage with your vehicle.
Car insurance can provide you with peace of mind knowing that a financial safety net is in place should something go wrong on the road.
Car insurance can cover the financial fallout if you damage someone else’s property or vehicle. If you opt for a higher level of coverage, you may also be covered for the repair or replacement costs of your vehicle after a collision, fire, theft or weather event.
Insurance policies can vary in coverage and price, which is why it’s important to review your options carefully and weigh up the benefits alongside the price.
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Pays for repair and replacement costs for your vehicle and others’ in an accident, regardless of who’s at fault. Comprehensive car insurance can also cover damage caused by fires, storms, hail and theft. If you’re worried about expensive repair or replacement costs caused by everything from accidents to hail, a comprehensive policy is the best way to protect yourself.
As the most basic level of car insurance, TPPD covers repair costs for another person’s vehicle and property that you damage in an accident, but does not pay for your own car’s repairs if you’re at fault. If you want to avoid paying repair or replacement costs for someone else’s vehicle when you’re at fault, you will need TPPD cover.
Offers the same level of cover as TPPD with the added inclusion of cover for fire-related damage and replacement costs, or if your car is stolen. Although it offers broader coverage than TPPD, this type of insurance won’t pay towards any repairs to your car if you’re at fault in an accident.
Compulsory Third Party or Green Slip policies compensate anyone you seriously injure or kill while driving. You can choose from several different CTP insurers, but only if you live in QLD, NSW, SA or ACT (other states and territories have one choice provided through the government).
CTP insurance is mandatory in Australia.
Young drivers may have questions about how car insurance works for them, what they have to pay and how they can make car insurance cheaper. We discuss the answers to all these questions and more in our guide.
Switching car insurance to a new policy or insurer is a fairly straightforward process. This guide covers the simple step-by-step approach for when you want to switch car insurance.
The cost of insurance (known as your premium) depends largely on the type of cover you hold (i.e., Comprehensive, Third Party Property Damage or Third Party Fire and Theft) and how risky you are to insure. That risk is based on a variety of variables which determine your car insurance premiums, including:
You might also be able to get a discount when purchasing a new policy online or when you bundle your car insurance with an insurer that you already have a policy with, like home and contents insurance.
With different types of car insurance to choose from, it can be hard to keep track of what each one covers. The inclusions, benefits and optional extras available may vary between the insurers in the market, so you should always read the Product Disclosure Statement (PDS) of any insurance policy before purchasing it.
To help you understand the types of car insurance, we’ve compiled the following table as a simple way to compare them. The information in this table should be used as a guide only, as different policies and insurers might offer varying coverage.
You can also compare policies and insurers for your own car and driving history just by using our free, easy-to-use comparison service.
| What is and isn’t covered? | Third Party Property Damage | Third Party Fire and Theft | Comprehensive | CTP/Green Slip |
| Damage caused by collision to your own vehicle | ✗ | ✗ | ✓ | ✗ |
| Loss or damage caused by you to a third party’s vehicle/property (legal liability) | ✓ | ✓ | ✓ | ✗ |
| Loss or damage to your own vehicle caused by weather (storm, flood, hail) | ✗ | ✗ | ✓ | ✗ |
| Loss or damage to your vehicle caused by theft | ✗ | ✓ | ✓ | ✗ |
| Hire car after theft | ✗ | ✓ | ✓ | ✗ |
| New car replacement | ✗ | ✗ | ✓ | ✗ |
| Loss or damage to your vehicle caused by fire | ✗ | ✓ | ✓ | ✗ |
| Loss or damage of personal possessions/effects | ✗ | ✗ | ✓ | ✗ |
| Damage to your vehicle caused by an uninsured driver | ✓ | ✓ | ✓ | ✗ |
| Emergency transport and/or accommodation | ✗ | ✗ | ✓ | ✗ |
| Towing | ✗ | ✓ | ✓ | ✗ |
| Key replacement | ✗ | ✗ | ✓ | ✗ |
| Death benefit | ✓ | ✓ | ✓ | ✗ |
| Legal liability for injuries or death to other people | ✗ | ✗ | ✗ | ✓ |
| Variable excess | ✗ | ✗ | ✓ | ✗ |
| Restricted driver discount | ✓ | ✓ | ✓ | ✗ |
There are a few exclusions common to all the different car insurance options. including:
You can get car insurance for your four-wheel drive (4WD or 4×4) like any other car. This insurance usually has limited coverage for off-road driving, with some conditions on when you will be covered for off-roading. We answer a host of questions about car insurance for 4WDs here.
Car insurance for 4x4s may not cover you in 4WD adventure parks and when driving on an unlisted (non-gazetted) road. There are also terms and conditions regarding vehicle recovery and roadside assistance that can have a big impact on 4WD owners, so it’s vitally important to read through the PDS for details before purchasing.
Some car insurance providers do cover ridesharing and you might find that it’s only covered on certain policies (such as comprehensive car insurance). You’ll typically be required to have Third Party Property Damage as a minimum by the rideshare platform you work for.
When comparing car insurance quotes with Compare the Market, make sure you select a ‘business use’ option when asked how you use your vehicle. You’ll then be asked follow-up questions about whether you transport passengers, food or goods for payment.
Car insurance can cover your vehicle for business use and for the same insured events as personal-use car insurance. If something happens on the roads while you’re travelling for business, car insurance with business use cover can cover you.
When comparing car insurance with Compare the Market, make sure you select the appropriate usage when you’re asked how you use your car.
Keep in mind that not all policies or insurers cover business use, and not all types of business uses may be covered. For example, you can be covered for driving to meet clients, driving to various work sites, running errands or transporting employees between locations, but not for transporting members of the public for a rideshare app.
The key difference between market value and agreed value car insurance is that with an agreed value policy, you know the total amount you’ll be covered for in the event of a claim as this amount was set when you bought the policy or renewed it.
It works like this:
Your car is likely insured for its market value, which refers to the value of the car in the present day and not the price you paid when you first bought it. Market value is typically calculated using an average price by comparing other cars of the same make and model that are in a similar condition to yours.
If repairs to your vehicle cost more than its market value (e.g. the car is a total loss and gets written-off after an accident), your car insurer will instead pay you the market value of your car or provide a replacement that has a similar market value.
This payout is subject to the terms of your policy. For example, you may be paid the market value of your vehicle if it was damaged in a bushfire through a Third Party Fire and Theft or comprehensive policy, or during a car accident with a comprehensive car insurance product.
If your car insurance policy offers an agreed value option, this means you can set the value of your car with your insurer. This can be handy because a car insured for its market value may lose such value over time. On the other hand, having an agreed value means you’ll receive the same payout on the day your car is written as you would have on the day you took out your policy. However, keep in mind that choosing an agreed value over market value may increase your premiums.
Furthermore, some agreed value policies do lose value over time, but at a set rate rather than the value in the car market.
‘Extras’ are inclusions or perks bundled into car insurance policies to extend your coverage. Some extras, like roadside assistance, will add to your premium if you choose to include them in your car insurance policy, while others may be complimentary.
Some common extras you may find can be added to your policy include:
Depending on your insurer, there may be a range of optional extras available to you when taking out car cover. Like all insurance products, it’s important to understand the fine print when choosing extras so that you fully understand what you’re covered for and how adding extras may affect the cost of your premium.
You can potentially save on premiums by:
Always disclose as much information to your insurer about your motor vehicle and yourself as they require. If you decide to hide your claims history, for example, your cover could be cancelled, or future claims could be denied.
An excess is the amount you’ll pay your insurer when you make an insurance claim, which is agreed upon when you first take out your policy. When you pay the excess, your insurer will pay the rest of your repair or replacement costs.
For example, if your excess is $500 and your car’s repair costs $3,000, your insurer will foot the $2,500 bill after you’ve paid your excess.
Depending on the situation, there may be different types of car excess that apply to your claim:
If a third party was at fault for an accident, you may not be required to pay an excess for any claims you make as a result of this accident, provided you can give your insurance company some details about the person responsible (i.e. their name, phone number, driver licence number and or their car registration). The exception to this rule is when the at-fault party can’t be personally identified. For example, say you’re involved in a hit-and-run and the guilty party does not give you their name, licence details or phone number, you may still be required to pay the excess if they can’t be tracked down.
You may be able to choose a higher excess payment and reduce your insurance premiums in turn. Likewise, you can choose a lower excess payment and pay an increased premium for the policy. Just bear in mind that whichever option you choose, you will have to pay for regardless.
To confirm all excesses that may apply to you, be sure to check your Product Disclosure Statement (PDS) and Insurance Certificate.
Windscreens and window glass can be covered by car insurance, as specified under your policy. For example, a Third Party Fire and Theft policy can cover damaged glass from vandalism or a fire. A comprehensive car insurance policy can also cover the cost of repairing accidental damage to your windscreen.
You might also see a windscreen excess reduction or waiver as an optional extra on the policy. Some insurers have a specific additional excess payment for windscreens that you would need to pay in a claim on top of any other excess payments that apply. Paying this waiver can reduce or remove the excess payment for windscreens.
Learner drivers are covered by car insurance, but some insurers require you to add them as a listed driver (not all do). You can contact your insurer to find out whether you need to list any learner drivers for them to be covered.
Should you need to make a claim while a learner driver was behind the vehicle, they may incur a young driver excess if they’re under a certain age limit at the time of the incident.
Liability refers to the person who is legally responsible or at-fault in an accident. For example, you may be liable for third-party damage if you didn’t give way and collided with a vehicle that was already on a roundabout.
Compulsory Third Party (CTP or Green Slip) cover is the only form of car insurance that covers your legal liability if you’re at-fault in an accident where another person is injured or dies. If you damage someone’s property or possessions, you could be liable for the cost of repairing or replacing those items.
Classic car insurance is a broad term referring to a product that covers classic, vintage or prestige vehicles. It’s typically broken down into a variety of specific types:
You may need to seek out a specialised policy or insurer to cover cars like these.
There are a wide range of car insurance providers operating in Australia, offering a variety of policies from the humble Third Party only car insurance to comprehensive coverage with all the bells and whistles
We currently compare car insurance products from the following brands:
We do not compare all car insurance providers in the market. At certain times, certain insurance policies might be unavailable.
The full list of car insurance companies operating in Australia (including the car insurance providers we work with) are listed below:
Accurate as of 28/04/2022
As Compare the Market’s resident expert in car insurance, Stephen Zeller is passionate about demystifying car insurance for consumers, so they have a better understanding of what they’re covered for. There are different types of car cover: comprehensive, third party fire and theft (TPFT) and third-party property damage (TPPD).
Stephen has more than 30 years of experience in the financial services industry, and is an Allied Member of the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) and helps review general insurance content on Compare the Market to ensure it accurately breaks down complex insurance topics.
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