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Agreed or market value

Market

Company
New car replacement

within 3 years

Roadside assistance

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 2 years

Roadside assistance

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 1 year

or 20000 km

Roadside assistance

Optional

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Agreed

Company
New car replacement

within 2 years

Roadside assistance

Optional

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 2 years

Roadside assistance

Optional

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 2 years

Roadside assistance

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 2 years

or 30000 km

Roadside assistance

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 3 years

or 50000 km

Roadside assistance

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Agreed

Company
New car replacement

within 2 years

Roadside assistance

Optional

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 3 years

or 60000 km

Roadside assistance

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Agreed

Company
New car replacement

within 2 years

Roadside assistance

Optional

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 3 years

or 50000 km

Roadside assistance

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 2 years

Roadside assistance

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 2 years

Roadside assistance

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 2 years

or 20000 km

Roadside assistance

Optional

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 3 years

or 50000 km

Roadside assistance

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 3 years

or 50000 km

Roadside assistance

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 2 years

Roadside assistance

Optional

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Either

Company
New car replacement

within 2 years

Roadside assistance

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details
Agreed or market value

Agreed

Company
New car replacement

within 2 months

or 70000 km

Roadside assistance

Features
Flexible excess to reduce premium
Pay monthly at no extra cost
Multi-policy discount
Online discount
Covers non-nominated resident driver
Rental car after accident available
Go to site
More details

What is car insurance?

A car insurance policy covers the insured person’s liability in case they are responsible for a motor vehicle accident. The extent to which car insurance covers you will ultimately depend on the the type of insurance policy you choose and the level of coverage it offers. Across all Australian states and territories, motor vehicles are required by law to be registered and insured under a compulsory third party (CTP) insurance policy at a minimum.

All drivers face a certain level of risk each time they get behind the wheel, which is why car insurance is necessary even for those who consider themselves to be responsible. If you're involved in a car accident and are the at-fault driver, your car insurance policy can help pay for the expenses incurred by the other driver, be it hospital payments or car repairs. Your insurance may also cover the cost of damage to yours and other people's property, including accidental damage to your car from natural disasters such as windscreen damage from hail.

The incidents and damages covered by your car insurance policy depend on the type of car insurance product you choose, ranging from CTP insurance to comprehensive car insurance which, as its name suggests, covers most kinds of accidental damage. The amount you may be charged for your policy will depend on a number of factors including the type of insurance, the make, model, and age of your car, your driving experience, and where you live. 

Comparing car insurance quotes online before buying or renewing your insurance policy can help you better understand the kinds of coverage Australia’s top insurance companies offer. It may also be helpful to read through the insurer’s Product Disclosure Statement (PDS) to understand the exact limits, inclusions and exclusions.

What types of car insurance do providers offer?

Having a good understanding of the different levels of cover provided by different types of car insurance can help you ensure you're paying for what's right for you. Without this information, you could end up with a policy that doesn't offer you the best bang for your buck.

There are four main types of car insurance:

1. Compulsory third party (CTP)

CTP insurance is a base level of car insurance that's mandated by law for vehicle owners in all Australian states and territories. Also referred to as a green slip, it generally only covers injuries to other people involved in a road accident if you are the at-fault driver. Your own injuries typically won't be covered by a CTP insurance policy, although some insurers may offer optional extra coverage. Only specific insurers who are licensed to provide green slips offer CTP insurance policies.

2. Third party property damage

If you want a policy that also covers damage your vehicle may have caused to the other person's car or property, you can opt for a third party property damage insurance policy. Some third party property damage policies will also cover damage to your car if it's hit by an uninsured driver - but not if you're at fault.

3. Third party property, fire and theft

Some insurers may let you add fire damage and theft coverage to your third party car insurance, with a third party fire and theft car insurance policy. Such an extended policy may also offer limited coverage for any injuries or damage you suffer in accidents caused by other drivers. Additionally, it could cover other expenses such as a hire car in the event that your car is stolen, or towing a damaged vehicle.

4. Comprehensive car insurance

A comprehensive car insurance policy is the most exhaustive and in turn often the most expensive type of insurance. It covers injuries and damages to both you and the other person involved in an accident if you are at fault. Damage to your car from extreme weather events including floods, storms, and bushfires is also covered, similar to how home insurance can protect homes from similar disasters.

Comprehensive car insurance policies should include, within limits, coverage for any of your personal or work-related items that may have been damaged while in the car at the time of an accident. Window glass breakage and emergency repairs, or ride sharing costs may also be covered in some policies. 

If you take out comprehensive car insurance on a new car and it's written off within the first two years, you may be eligible for a new replacement car.

Optional extras

In addition to these preset types of insurance, many providers will also offer add-on coverage for a number of other incidents. For example, insurance with roadside assistance can be helpful in the event you need a jump start, tire change or towing.

How do I know if my car is insured?

It's safe to say that in Australia, if your car is registered, it is insured. This is because it is a legal requirement to have your car insured before it is registered. In most states and territories, CTP insurance is included as part of your registration. In NSW, however, paying for your insurance policy is an extra step you must take before completing your registration.

To check whether your car is currently registered, and to check who your insurance provider is, visit your state or territory's car registration and licensing authority's website.

Does everyone with a car need insurance?

By name, compulsory third party (or CTP) insurance is exactly that - compulsory. So, even if you're willing to risk not being covered for most costs involved with being in an accident, as a car owner in Australia, you will need at least to at least have CTP insurance.

If you're buying a used car, it's important to check when its registration and insurance is due to expire. Existing registration and CTP insurance should be transferred to you along with ownership. New cars, on the other hand will typically have the cost of registration and CTP insurance built into the drive-away cost, as the dealership will typically register and insure the new vehicle on your behalf.

If I let someone drive my car, does my insurance need to cover them?

Before you hand your keys over to a friend or a family member, you may want to check whether your car insurance policy’s coverage applies if someone else is driving your car. 

A car must be insured under the name of the primary driver of the vehicle, but you can have additional drivers listed on your policy if there are other people who drive your car on a somewhat regular basis. This can, however, be more costly depending on the age and driving history of the additional drivers.

Alternatively, if someone drives your car who isn't listed on the insurance policy and an accident occurs, you may be charged an additional excess on top of your basic excess to make a claim. How this works and how much excess you may be charged differs from one insurer to the next, so it's important to check your policy for information specific to your circumstances.

How much does car insurance cost in Australia?

The cost of car insurance premiums (which is the recurring amount you pay an insurer to cover you) can vary greatly due to a number of factors, including the following:

  • Type of car insurance: CTP insurance policies tend to have lower premiums, while comprehensive car insurance policies generally come at the highest cost.
  • Driver's age: Young drivers are generally seen as a higher risk to insurers due to their lack of experience and therefore may be charged a higher premium than more mature and experienced drivers.
  • Driving history: If you have a history of driving infringements and/or have made car insurance claims in the past, this may negatively affect how much you pay. In contrast, those with a clean driving record may be rewarded with lower premiums.
  • Type of car: More expensive cars such as luxury vehicles often cost more to insure, as they will generally be more costly to repair or replace. Performance vehicles may also push up your premium.
  • Where you park your car: The area you live in will have an impact on your premium, as will your parking situation. For example, if your car is parked in a lock-up garage most of the week, it's likely to score you a lower premium than if it was parked on the street - particularly in an area with high crime rates.

You might like to consider comparing personalised quotes from a number of different providers so you can choose a policy that works best for your personal financial situation.

What is car insurance excess?

Car insurance excess is a fixed amount of money that you are required to pay your insurer when you make a claim. The figure, which is an amount agreed to when you sign up to a new policy, is used to pay for part of your repairs. For example, if your excess is $1000 and the repair costs are $2500, you'll be out of pocket $1000 and your insurer will cover the remaining $1500. 

The amount of excess you pay directly relates to the cost of your insurance premium. Agreeing to a higher excess will bring your monthly premium down, while opting for a lower excess will mean paying a more costly premium. You will generally be able to decide what's right for you, but the insurance provider will typically have lower and upper limits to how much excess you pay.

Once you know what your excess is, it might be worth considering putting aside that amount in savings if possible, so that it's there if or when you need it.

What is a no-claims bonus?

A no-claims bonus, otherwise known as a no-claims discount, gives you a discount on how much you pay for your car insurance if you don't make a claim. It is put in place to reward and incentivise safe drivers. The discount can reduce your payments each year that you don't make a claim, typically up to a maximum number of years.

While a no-claims bonus may seem like a great opportunity to save money, ASIC's MoneySmart states that "a no-claim bonus doesn't always reduce the cost of your insurance". For more detailed information on how no-claims bonuses work, consider visiting the MoneySmart website.

What is the best car insurance?

There's no single best car insurance product on the market - it's more about figuring out what works best for your personal circumstances and requirements.

In order to find what's best for you, you'll need to consider your budget, age, the type of car you drive and the level of risk you are willing to take.

For example, sometimes comprehensive car insurance might be the right choice for you, such as if you've just bought a new car and the cost of the premium for comprehensive insurance works comfortably within your budget. But other times it might not be the right choice, even if you can afford it - such as if the resale value of your car isn't much more than the excess you'd pay if you needed to make a claim. 

Ultimately, you'll need to carefully weigh up what your insurance policy can offer you and whether it's good value for money.

How do I compare car insurance?

You'll likely find it easier to compare car insurance quotes if you're comparing apples with apples. Here are some of the factors you may want to consider in order to narrow down your search:

Type of coverage 

By now you should have a general understanding of the differences between CTP insurance, comprehensive insurance, and everything in between - including add-ons such as roadside assist. A reasonable first step to take when comparing car insurance is to decide which of these types of coverage may work best for you.

Cost of premium

Your insurance premium is the recurring payment you'll be charged by your insurer. Comparing the cost of premium charged by one provider to the next may help you compare value, but be sure to factor in the correlating amount of excess applicable for each so that your comparison is fair.

Cost of excess

It's important to pay attention to how much your car insurance excess is, so that you're not taken by surprise when you go to make a claim. Keep in mind that if your excess is high, you'll likely be unable to make a claim for smaller accidents with less costly repairs.

Market value vs agreed value 

If you're taking out comprehensive car insurance, you can choose to cover the car (in the event that it is written off) for either the market value or an agreed sum.

A market value car insurance policy, which tends to be the default option, will require your insurer to pay the amount your car would sell for on the open market. The insurer will estimate this amount based on the market value at the time of the accident.

An agreed value policy, on the other hand, allows you to specify the amount covered. This option gives you the certainty of knowing the amount you’ll receive from the insurer in the event you have to file a claim.

There are pros and cons to both options, so it's important to do your research before choosing what might work best for you.

How do I make a car insurance claim?

If you're involved in an accident or your car is damaged or stolen, it's important to work through each step of the car insurance claims process carefully. Consider the following example:

  1. Ensure you and any other parties involved are safe.
  2. If you cannot come to an agreement as to who was at fault, you may need to call the local police for advice.
  3. Exchange details with the other driver, including insurance information and personal identification.
  4. Take photos or video of any damage to yours and the other driver's car.
  5. Write down details of the accident such as the exact location, date and time it occurred.
  6. Gather your notes and photo evidence and submit your claim to your insurance provider. You will typically be able to do this online via your provider's website. Alternatively, you could contact them directly over the phone for help.
  7. The insurance provider will then seek to confirm who caused the accident and, accordingly, work on settling the claim by negotiating with the other driver’s insurer.
  8. If you are the at-fault driver, you will need to pay excess at this stage before the claim can be settled.

Keep in mind that the sooner you can report to your insurer, providing as much detail as possible, the faster your claim is likely to be processed.

How to choose car insurance?

With so many types of car insurance out there, it can be a challenge to choose the right one for you. Factors to consider when choosing car insurance include the cost, the inclusions, and the benefits of each, which may vary from provider to provider. When choosing a car insurance company, spend some time comparing what is, and what isn’t, covered by the policies.

Compulsory third party (CTP) insurance is part of your car registration cost. However, CTP does not protect you against damage to your car if it’s written off after an accident or if it gets stolen. Moreover, you might have to pay for damages to someone else's property in case of an accident.

Other covers you may wish to consider are third party property insurance, third party property, fire and theft insurance, and comprehensive insurance. While you might want to get additional insurance, not everyone requires the highest cover, and it depends entirely on several factors, such as the make and age of the car or the area where you live.

You can compare car insurance providers to get a policy that suits your needs.

Can you have a car without insurance?

Can you have a car without insurance? The simple answer is ‘no’ and driving without insurance is illegal. Every vehicle in Australia is required to have at minimum a Compulsory Third Party (CTP) insurance policy to be registered to drive.

Having car insurance beyond CTP is entirely up to you as the driver and owner of the vehicle. You may want to keep in mind, however, that being in a car accident can be traumatic, especially if it results in vehicular damage or injuries.

Dealing with any expenses that arise in an accident when you are at fault can cause additional stress. This is especially true if you don’t have insurance coverage that will assist in paying for these damages.

Compulsory third-party insurance

In multiple states and territories, the cost of CTP insurance is included in the registration expenses. For the states or territories where it’s not included, CTP insurance needs to be confirmed before you’re able to pay for registration. CTP insurance protects you against claims arising due to accidental injuries or death when you are involved in an at-fault car accident.

Why is CTP inadequate?

CTP does not cover damage to third-party property or any of the vehicles involved in the accident. The driver who is responsible for the accident is liable to cover all the expenses. Therefore, if you only have CTP insurance, you’ll have to pay for other expenses, such as car and property repairs, towing, and potentially car rental. If you want a policy that covers these costs, you need a comprehensive or third-party property damage insurance policy.

If you’re asking, is it illegal to have a car without insurance, the answer isn’t simple. Specifically, it is illegal to not have a CTP policy at the very least, but any insurance beyond that is a choice. If you’re caught driving an unregistered vehicle --  if you don’t have a CTP insurance policy, that is -- you may receive infringement notices that include fines and a loss of demerit points.

Does car insurance cover contents?

Thousands of vehicles are stolen each year, but insurance can protect you from financial loss.

A common question you may have is what does my car insurance cover? This depends on the type of insurance and there are four basic types of car insurance, and each offers different cover.

 

Types of car insurance

Compulsory third-party (CTP) insurance indemnifies you against liabilities arising due to personal injuries to another party. A third-party fire and theft insurance policy covers loss to your car or third-party property in an accident. It also covers expenses if your vehicle is damaged in a fire or stolen. Third-party property insurance covers any liability resulting from damage to third-party property but any damage to your property is not covered under this policy.  Comprehensive policy covers most costs arising in case of an accident to either your car or third-party property.

 

Does car insurance cover stolen contents?

Does car insurance cover contents lost in case of a theft? Generally, any valuables stolen from the vehicle, such as your phone, are not covered under car insurance. However, some insurers offer vehicle contents insurance that does cover the loss of valuables from your car.

Consider reading your policy’s product disclosure statement (PDS) to find out if it covers contents, or contact your insurer directly.

Remember, there are several ways in which you can prevent theft of both your car and contents. Being a little more cautious can make a huge difference.

Can you insure your car for 6 months?

Most Australian insurers won’t offer you a 6-month car insurance policy, so you may need to buy a policy that covers your car for damages and cancel it after six months. You will need to purchase comprehensive car insurance to protect your car from accidental damage, theft, vandalism, or natural disasters.. 

Consider checking whether your 6-month comprehensive car insurance will cost more if you pay monthly or six-monthly premiums instead of a one-time annual premium. Another question to ask the insurer is whether you’ll need to pay administration or cancellation fees when you cancel the policy.

Alternatively, you can look for a suitable ‘pay as you drive’ car insurance policy, which usually offers you the coverage of a comprehensive car insurance policy but only requires you to pay for the distance driven. Such a policy may not be the ideal 6-month car insurance plan as it is based on how much you drive rather than for how long. If you need to drive a lot, you may end up paying more than you’d pay for regular car insurance. 

Can I get a refund on car insurance?

Have you decided to cancel your car insurance policy? Maybe you’ve sold your car, or you found a better rate elsewhere.  Perhaps you’re just not driving it anymore. So what happens to the unused amount of your car insurance? Can you get a refund on unused car insurance in such a scenario?

It often depends on who cancelled the policy: you or your insurance provider. If you initiated the process of cancellation, then you may be able to get most, if not all, of your unused amount. There might be some cancellation fees involved.

However, if the policy has been cancelled by your provider, because you defaulted on a payment, then you will not receive any refunds. Keep in mind, sale of your vehicle, or traffic violations such as receiving too many speeding tickets, or being charged with reckless driving, are not reasons to withhold refunds.

If you pay your insurance monthly, your future payments will simply stop. However, many insurance policies are paid upfront for the year, as some companies offer discounts. If this is the case, get in touch with your insurer about getting a refund for the unused amount.

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.