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Top 3 things to know about car insurance in Victoria

Learn the different types of car insurance cover

There are three different types of insurance you can choose from to protect your car in Victoria, in addition to compulsory third-party cover.

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What might influence my premiums

Various factors can affect how much your insurance costs, so it’s important to know what these might be so you can look for ways to save money on your premium.

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Consider which features will help you protect your car

If you drive in Victoria, there are some useful add-on features you may be able to purchase to give your car greater protection.

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Car insurance

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A guide to Car Insurance in Victoria

Last updated 19/02/2024

Kenneth Young
Written by Kenneth Young

Adrian Taylor, General Manager of General Insurance
Reviewed by Adrian Taylor

Find out more about Car Insurance in Victoria

What types of car cover are available in Victoria?

Comprehensive car insurance

A comprehensive car insurance policy is the highest level of car insurance, covering you for financial loss or damage to your car from insured events like theft, fires, storms, floods, malicious acts and accidental damage. A comprehensive policy can also cover the damage you cause to someone else’s vehicle or property following an accident.

Third Party Fire and Theft (TPFT)

Third Party Fire and Theft covers you for damage you cause to other people’s cars or other people’s property, as well as for loss or damage to your car from fire or theft. Some insurers may also offer conditional cover for your own vehicle where you’re not at fault in an accident and the other driver isn’t insured.

Third Party Property Damage (TPPD)

Third Party Property Damage (TPPD) covers the expenses of another person’s damaged property or vehicle when you’re at fault for an accident. It can sometimes provide a limited amount of cover for your own car’s loss or damage as a result of the accident. However, this depends on certain requirements being fulfilled (e.g. if the at-fault driver isn’t insured).

Compulsory Third Party (CTP)

Compulsory Third Party (CTP) insurance covers passengers, other drivers, road users and pedestrians for death or injuries caused by an accident that is caused by your vehicle. CTP doesn’t cover the damage you cause to cars or property, including your own. It’s a minimum insurance requirement across Australia and is provided by Victoria’s government-owned Transport Accident Commission (TAC) and paid through the transport accident charge in your car registration fees to VicRoads.

Which type of car insurance should Victorians get?

CTP insurance is a requirement for all Victorian drivers when they first register their car or renew their registration. However, an additional level of cover is always a good idea to help protect your own car; it just depends on which type suits your needs.

Your significant investment shouldn’t go to waste after one accident (especially if it’s a brand-new car), so here’s a comparison of car insurance options to consider.

Insurance typeDamage to your carDamage to another person’s car or propertyDamage or loss caused by theft or fire
Comprehensive
TPFT
TPPD
Please note: There are certain factors and variables that may affect your level of coverage.

Always read the relevant Product Disclosure Statement (PDS) for specific exclusions and conditions to the cover. You should also read over the Target Market Determination (TMD) to help you decide whether this product is suitable for you.

Which features should Victorian drivers look for in a car insurance policy?

sunset in victoria
Car insurance can provide a range of benefits, with higher levels of insurance offering a greater range of perks and cover. You may be able to choose some of the below features to add to your policy as optional extras if they don’t come as standard inclusions.

Note that adding extra coverage options will likely cost you more in premiums.

Car insurance in Victoria

How does living in Victoria affect my car insurance?

Your car insurance premium is in part affected by the state or territory you live in; for example, whether your home is in a floodplain or bushfire zone or if your neighbourhood has a high rate of car thefts. However, it can also be affected by where you park, like whether your car is secured safely in a garage or parked on the street.

Car thefts in Victoria

Victoria has one of the highest rates of car thefts in Australia. In 2022, there were 12,000 vehicle thefts reported to the Victorian Police, according to the Australian Bureau of Statistics.1 That’s 2,000 more reported cases than 2021. In the 12 months to March 2023, a further 17.9% increase in stolen vehicles was recorded by Victorian Police records.2

Important to know

driving in victoria with car insurance

Do I need car insurance in Victoria?

In Victoria, having at least CTP insurance is required by law. However, having a level of car insurance beyond that is still a smart idea. Mishaps can strike at any time while you’re on the roads, so it’s best to have some level of cover to protect your car.

How much is car insurance in Victoria?

The cost of car insurance will change for each driver, because your premiums are calculated using a variety of factors that are usually unique to you. Some of these factors include:

Does my car insurance cost more in regional Victoria or inner-city Melbourne?

The cost of your car insurance is a bit more complicated than just whether you live in Melbourne or out in the Victorian bushland. That said, the postcode you live in does play a part in how much your insurance will cost.

For example, perhaps your regional Victorian town has safe roads but a high rate of motor vehicle thefts. Or your inner-city suburban home is safe from thieves and your car is garaged at night, but you live near a busy intersection that has lots of crashes. Taking out a new policy for either situation might cost a bit more than somewhere with low rates of theft and accidents, regardless of where it is in the state.

Of course, Melbourne is also well-known for its natural weather events, sometimes in the extreme. A slew of hailstorms can drive up claims and, therefore premium rates in your area, which can play a very real part in why insurance costs can vary across Victoria.

Why are my car insurance premiums affected by different factors?

Just like anywhere else in Australia, your car insurance premiums will depend on several factors. The reason for this is because your unique situation will be different to other drivers, and so your car insurance costs are calculated to reflect that.

Some details that are used to determine your premium include:

How do I find cheaper car insurance in Victoria?

If you’re looking to lower the cost of your vehicle’s insurance, here are some things to consider (depending on your policy and needs):

Adrian Taylor, General Manager of General Insurance

Meet our car insurance expert, Adrian Taylor

As the Executive General Manager of General Insurance at Compare the Market, Adrian Taylor has over 13 years’ experience in the financial services industry. Adrian specialises in customer experience and is dedicated to helping customers better understand insurance products so they can save money on their household bills.

Want to know more about car insurance?

Sources

1 Crime Victimisation, Australia: Household crime victimisation and reporting rates. Australian Bureau of Statistics. 2023. Accessed February 2024.

2 The National Tribune: Victoria Police statement in relation to Crime Statistics Agency data release – twelve months to end of March 2023. Accessed February 2024.

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