Whether you’re checking out the beautiful scenery across the country or only driving to work, the preferred mode of travel for many Australians is by car. While most people are careful behind the wheel, some accidents are difficult to avoid, which is why it’s important that every car owner takes out car insurance.
There are four types of car insurance: comprehensive cover, Third Party Fire and Theft, Third Party Property Damage and Compulsory Third Party (CTP) insurance. We’ll explain what each type covers, as well as the differences between them.
The table below provides a quick visual breakdown of the key events that are covered by the different types of car insurance. Keep in mind that there can be other benefits and features covered by car insurance, like towing or hire car costs following an insured event.
As with each policy, there are exclusions and limitations.
| What do different levels of car insurance cover? | ||||
| Type of incident | Comprehensive | Third Party Fire and Theft | Third Party Property damage | Compulsory Third Party |
| Damage to your vehicle from an accident | ✔ | ✖ | ✖ | ✖ |
| Damage to other vehicles and property | ✔ | ✔ | ✔ | ✖ |
| Theft | ✔ | ✔ | ✖ | ✖ |
| Fire damage | ✔ | ✔ | ✖ | ✖ |
| Storm damage | ✔ | ✖ | ✖ | ✖ |
| Flood damage | ✔ | ✖ | ✖ | ✖ |
| Liability for the injury or death of others | ✖ | ✖ | ✖ | ✔ |
| * Damage caused by an uninsured third-party where you’re not at fault can be covered, provided you did not contribute to the accident and could identify the motorist who was responsible. | ||||
Be sure to read the PDS of any policy before purchasing for details on exactly what’s included, as well as the TMD to check if the policy is suitable for you.
The key difference between comprehensive car insurance and a third party policy is the protection they offer after you have a car accident.
Comprehensive insurance covers the damages caused to both your car and any other cars and property. Third party insurance, on the other hand, only covers damages you cause to other cars and property involved, not your own car.
Another difference worth noting is the price. Third party car insurance policies generally have lower insurance premiums than comprehensive ones due to limited coverage.
A comprehensive car insurance policy insures your car for a wide range of events and incidents, regardless of who’s at fault. Comprehensive car insurance provides the highest level of cover and can help you minimise costly out-of-pocket expenses if something happens to your vehicle.
Being the top level of car insurance out there, comprehensive policies typically have a higher premium compared to other policies. They do have a much wider range of benefits for this higher price, such as accidental damage, new car replacement and storm damage in addition to everything included in the other, lower levels of car insurance. You might also have the choice of paying for extra benefits.
If you have a luxury vehicle, an older classic or a collectible car, it would pay to look into a comprehensive policy as some will provide for an agreed value for your expensive car so you can be insured for its true value should it be damaged in an accident. Not all insurers can adequately cover you for your particular or rare vehicle, but out of all insurance options, comprehensive cover provides the most protection.
Third Party Fire and Theft insurance (TPFT) covers damage you cause to other people’s property and motor vehicles. It also provides coverage for your car if it’s stolen or destroyed by fire. Depending on your policy and insurer, you might have limited cover for the cost of a hire car if your vehicle is stolen, as well as damage to your vehicle from an uninsured driver.
Third Party Property Damage insurance (TPPD) is the lowest level of car insurance and covers you for damage you cause to other vehicles and property. It doesn’t cover your own vehicle for any damages or losses, except in very limited circumstances (e.g. the accident was caused by an uninsured driver).
The key difference between comprehensive car insurance and a third party policy is the protection they offer after you have a car accident.
Comprehensive insurance covers the damages caused to both your car and any other cars and property. Third party insurance, on the other hand, only covers damages you cause to other cars and property involved, not your own car.
Another difference worth noting is the price. Third party car insurance policies generally have lower insurance premiums than comprehensive ones due to limited coverage.
Compulsory Third Party (CTP) covers injuries or deaths as a result of a road accident you may be liable for. It’s something all cars in Australia must have and is usually part of your registration; in New South Wales, though, it’s purchased as a separate policy and often referred to as Green Slip insurance.
In some states (such as Queensland, New South Wales, the ACT and South Australia), drivers have the option of choosing their CTP insurer when paying for registration. In other areas, such as the Northern Territory, there is only one option.
While car insurance policies have standard offerings, you might be able to purchase optional extras for more coverage. Examples of these add-ons can include:
The extras available to you will depend on the level of car insurance you have and your insurance provider. Some of them might come as a standard feature in your insurance policy, while others may carry some limitations. Always read your insurer’s PDS for specific information on what’s covered by your policy.
You may have some choices when taking out your car insurance policy which allows you to tailor your insurance. This includes things such as:
Also, you may have a no claims discount (NCD) based on your driving history, which can help you save money on your car insurance.
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.
When searching for cover, comparing policies can help you weigh up premiums, excess payments and benefits. Comparing car insurance with us is easy, saves you time and might just help you find a great deal.
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