Obtaining your licence is a rite of passage, giving you the freedom and independence to do all the exciting things that you want to do. However, with this freedom comes responsibility, and for younger drivers that means learning about car insurance.
We’re here to help you navigate the car insurance landscape with this guide to insurance for young drivers.
We understand it could be overwhelming with the types of car insurance available to both younger and older drivers. We’re here to help break it down so you understand the policies to help you get your car on the road quicker.
There are four options of insurance coverage:
Did you know? It’s a legal requirement to have Compulsory Third Party (CTP) on any car that’s driven on Australian roads; in some states, CTP is automatically included in your registration.
The table below highlights the differences between the four types of insurance coverage and what they offer.
| Type | Damage to your vehicle | Damage to other cars and property | Damage or loss caused by theft or fire | Liability of injuries or death to others |
| Compulsory Third Party (CTP) | No | No | No | Yes |
| Third Party Property Damage | No | Yes | No | No |
| Third Party Fire and Theft | No | Yes | Yes | No |
| Comprehensive | Yes | Yes | Yes | No |
Before taking out car insurance it’s important that you read the Product Disclosure Statement (PDS) to understand your policy’s inclusions, exclusions and conditions to find the right type of policy for you.
There are various factors that insurers use to determine the cost of coverage for all Australians, including younger drivers. These factors include:
Our car insurance comparison tool helps you compare a variety of insurance policies and prices. It takes just a few minutes, is easy to use and is completely free.
According to the Queensland Government, drivers aged between 16 and 24 are 60% more likely to be involved in serious crashes than mature drivers.1 This is a reason why car insurance for a 17-year-old, for example, would usually cost more than it would for a more experienced driver.
Some key reasons younger drivers are more likely to be involved in accidents include:2
As a result of these factors, car insurance for young drivers in in this age group would generally cost more than it would for people over 25.
By now, you know that car insurance for younger drivers will likely cost more than it would for older motorists. Still, there may be ways you can reduce your premiums. Here are some factors to take into consideration:
Read our guide for more helpful tips on how you can reduce your car insurance premiums.
There are cheaper insurance options like Third Party Property Damage (TPPD) and Third Party Fire and Theft (TPFT) insurance. These policies are typically more affordable than Comprehensive car cover. That said, TPPD and TPFT insurance will not cover your car in the event of an accident, only a third party’s property that you damage in an incident.
Comprehensive car insurance offers the highest degree of protection on the road. While it’s more expensive than third party insurance, that doesn’t mean it’s unaffordable.
One way to find a great-value policy is by comparing policies, and shopping around allows you to compare the cost of deals. Before you decide on car insurance, consider the type of protection you require. Keep in mind that the factors listed above (such as the car you drive and where you park it) may impact the amount you pay.
Here’s a breakdown of what’s included in each level of car insurance.
As the highest level of car insurance, Comprehensive covers your car if it's damaged in an accident or by weather events (like storms or fires) and if it’s vandalised or stolen. Included with cover for your vehicle are other cars and property that you could accidentally damage.
This covers damage to other drivers’ property and vehicles if you cause a car accident. It may also offer limited cover for your car’s value in an accident – but only in some circumstances. This includes if another driver causes an accident and they’re not insured.
You’ll be covered for damage to other vehicles if you cause a crash and provides limited cover if your car is damaged by fire or stolen.
It’s a requirement in all states and territories to take out CTP insurance (also known as Green Slip insurance in NSW). In some states, it's included in your car registration. It only covers costs associated with the death or injury to others if you cause an accident; it doesn’t cover damage to any vehicle or property.
Other factors may impact your premium and what you pay when you claim. Here are a few things you may want to consider:
It’s important to understand the terms and conditions of your policy, which is found in your Product Disclosure Statement (PDS).
Car insurance covers a vehicle and not individual people. Generally, you will not need to purchase a separate insurance policy to drive your parents’ car, provided that the car is insured. However, your parents must contact their insurer to advise that you’ll be driving their car. You’ll also need to be added as a listed driver to your parents’ policy to be covered when you drive it.
Their insurer will be able to confirm whether you are covered while driving their vehicle, any amendment to premiums and what excesses may be applicable if you have an accident. Some insurers have hefty excesses for drivers under 25 or unlisted individuals.
If your parents or guardians don’t advise their insurer that you’re driving their vehicle, there’s a risk that the insurer will not pay out a claim, or they may incur a much higher excess than they anticipated.
Compare car insurance through our free comparison service today.
As each insurance company states different terms and conditions on their policies, there are no specific promises of lowering premiums as you get older. It generally comes down to years of driving experience and a blemish-free driving record that helps reduce the cost of premiums.
If your friend will regularly be driving your car, it’s a good idea to list them as an additional driver. This is usually as simple as providing your insurance company with their information. Keep in mind that this may affect your premiums and the excess you’ll pay in the event of an accident.
Generally, insurers will require the following information:
Every policy differs and, depending on your insurer, you may not need to list a learner driver. To be safe, it’s recommended you contact your insurer to check if learner drivers are covered under your policy or if there are specific guidelines you need to follow. Rules surrounding those who move onto their provisional or unrestricted licenses can also vary between insurers, so discuss this with your insurer.
If a learner is the registered owner of a car, they will need to be listed as the person insured.
Compare the Market’s General Manager of General Insurance, Stephen Zeller, wants to make sure young drivers are equipped with knowledge and understanding so they can navigate their car insurance policies with ease.
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.
Whether you’re looking for car insurance for 18-year-olds or a policy for someone in their early 20s, we make it easy for drivers under 25 to compare a range of car insurance options. Our comparison tool is free, takes just minutes to use and provides you with a variety of deals, prices and features to consider.
1 Queensland Government – Young drivers. Last updated March 2021. Accessed October 2021.
2 Department of Transport and Main Roads – ‘Young drivers: The facts’. Accessed October 2021
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