Help CenterWhat Is Car Insurance?
Car insurance is a type of insurance that covers you when driving a motor vehicle, helping you meet the costs of any damage to your own car or others in the event of an accident.
What are the Different Types of Car Insurance?
There are four basic levels of car insurance in Australia:
Compulsory third-party insurance
Compulsory third-party insurance (CTP), as the name suggests, is a mandatory requirement for driving on Aussie roads. What it’s called, its price and how you apply for CTP varies across the states, but it broadly covers costs related to injuries or death in motor vehicle accidents.
In NSW, Queensland and South Australia, CTP is underwritten by private insurance companies. This means prices can differ depending on which provider you choose. Meanwhile, in Victoria and Western Australia, it goes directly through the relevant state government and is automatically included in vehicle registration costs.
Insurance is complicated, so be sure to check exactly who is covered (i.e. the at-fault driver vs all impacted parties) by CTP in the state where you live, as well as any limits on how long that coverage lasts as well as dollar caps.
Third-party property damage
This is the most basic and cheapest coverage type. It only covers damages you cause to other vehicles or property while driving, not your own car. If you think the value of your wheels doesn’t justify a pricer policy, but want to ensure you’re not footing the bill if you prang a Porsche, this option may suit you.
Third-party fire and theft
This may be a great coverage option for those seeking to cover damage to their own car as a result of damages specifically caused by fire or theft with this policy. It could be useful for those living or driving regularly in high crime-risk areas, especially if you park your car on the street.
Comprehensive insurance
While they differ between providers, these policies cover a broad set of situations that may damage your car, as well as damages to other people’s vehicles and property.
It’s the highest tier of car insurance, but that doesn’t mean it covers everything – be sure to read your product disclosure statement (PDS) for exclusions that may void your policy.