Can I have two insurance policies on one car?

CTP

Everyone who drives a car in Australia must have Compulsory Third Party (CTP) insurance to register the vehicle. If you were found driving in an unregistered vehicle without CTP insurance, you’d likely have to pay a big fine and may even have to go to court. CTP insurance covers injuries to pedestrians and other drivers in the event of an accident, but nothing else.

Because CTP is required to register a car, the policy is linked to a vehicle rather than an individual. When you buy a second-hand car, it will often already have a CTP policy in place.

You can choose to take out a second car insurance policy, separate from your CTP, to insure your car against more events. You aren’t required to take out car insurance from the same insurer as the one that provides your CTP policy, and vice versa, though sometimes you may be eligible for a discount if you do so.

Third-Party Fire & Theft

This type of car insurance covers damage to other cars and property in the event of an accident, and covers your own vehicle if it is stolen or damaged by fire.

Some Australians choose Third-Party Fire & Theft car insurance to help them get some coverage in case of potentially expensive events, while keeping their premium costs down.

Comprehensive

Comprehensive car insurance covers everything you’ll find in a Third-Party Fire & Theft policy, and more. For example, a Comprehensive car insurance policy may cover damage to your own car in the event of an accident, as well as the cost of a hire car and more. While Comprehensive policies offer some of the most coverage, they are often some of the most expensive options for car owners to consider.

Some car finance providers require borrowers to have a comprehensive car insurance policy in place as a condition of their car loans. This helps to reduce the lender’s financial risk as there’s less chance of the car being completely written off if it’s involved in an accident.

Most car insurance policies allow you to name more than one driver on the one policy, so there’s no need to take out a separate policy. Keep in mind that naming some drivers on your policy, such as under-25s, or new drivers with little driving experience, could increase the cost of your insurance premiums.

Your policy may also cover you even if the driver isn’t named on the policy, though you may need to pay an additional excess in cases like these.

There’s usually no need to have two car insurance policies at the same time if both policies cover the same events. You’ll be paying double the premiums for the same benefits.

There are some instances where you may accidentally have two of the same car insurance policies, such as if one policy has automatically renewed, but you sought insurance elsewhere without realising.

It’s not illegal to hold two car insurance policies, but if you do have two policies and are involved in a car accident, you cannot file claims with both insurance companies – that’s fraud, and may have serious legal consequences.