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What is car insurance?

Car insurance protects you against financial loss for damages resulting from car accidents, theft, weather events and other unforeseen costs according to your policy type. A car insurance policy helps pay for the cost of damage to cars, property, and even people.

What does car insurance cover?

It can cover you if you cause personal injury in an accident or if you damage property or another vehicle. If you opt for a higher level of coverage, you may also be covered for the repair or replacement costs of your vehicle as a result of collisions, fire, theft, and weather events. Most policies will vary in coverage (and price), which is why it’s important to review your options carefully.

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Learn more about car insurance

Comprehensive Car Insurance

Pays for repair/replacement costs for your vehicle and others – regardless of who is at fault. It also can cover damage caused by fire, storm, hail, and theft. If you’re worried about expensive repair or replacement costs to both your vehicle and others, then a comprehensive policy is the best way to protect yourself.

Third Party Property

Covers repair costs for vehicles and property owned by others, but does not pay for your own car’s repairs if you’re at fault. If you want to avoid paying repair or replacement costs for someone else’s vehicle when you’re at fault, you will need Third Party Property cover.

Third Party Fire & Theft

Offers the same level of cover as Third Party Property, with the inclusion of cover for fire-related damage/replacement costs, or if your car is stolen. Although it offers broader coverage, this type of insurance won’t pay towards any repairs to your car if you’re at fault in an accident.

CTP Insurance (i.e. Greenslip)

Compulsory third party policies compensate anyone you seriously injure while driving. You can choose from several different providers, but only if you live in QLD, NSW, SA or ACT.

Frequently asked questions

How much is car insurance?

The cost of insurance depends on the type of cover you hold (i.e. Third Party Property, Third Party Fire & Theft or Comprehensive), and how risky you are to insure, meaning premiums can vary.

When using our online comparison, we ask you to enter certain details to help you find products that may suit your needs and budget. Each of these questions can impact your premiums in some way, including:

  • Your claims history
  • Your address
  • Where your car is parked (i.e. in a garage or on the street)
  • Your driving history (and the driving history of other listed drivers).

What’s the difference between types of car insurance?

With several different types of car insurance out there to choose from, it can be hard to keep track of what each one may or may not cover. Of course, the inclusions, benefits and optional extras available may vary between the many providers out there, so you should always read the Product Disclosure Statement (PDS) of any insurance policy before purchasing it.

To help you understand the types of car insurance, we’ve compiled the following table as a simple way to compare them; however, the information in this table should be used as a guide only. Just so you’re aware, the table’s information is based on quotes for each type of insurance from Budget Direct, Virgin Money and Australia Post for a 2010 Mazda 3 sedan driven for personal use by a female driver born in 1985 with a Rating 1 NCD.

You can also compare policies and providers for your own car and driving history just by using our free, easy-to-use comparison service.

Car insurance: compare different levels of cover

What is and isn’t covered?Third Party Property DamageThird Party Fire and TheftComprehensiveCTP/Green Slip
Damage caused by collision to your own vehicleNoNoAvailableNo
Loss or damage caused by you to a third party’s vehicle/property (legal liability)Available; e.g. $20 millionAvailable; e.g. $20 millionAvailable; e.g. $20 millionNo
Loss or damage to your own vehicle caused by weather (storm, flood, hail)NoNoAvailableNo
Loss or damage to your vehicle caused by theftNoYesAvailableNo
Hire car after theftNoAvailable; e.g. up to $1,000 or 14 days (whichever comes first)Available; e.g. up to $1,000 or 14 days (whichever comes first)No
Loss or damage to your vehicle caused by fireNoYesAvailableNo
Loss or damage of personal possessions/effectsNoNoAvailable; e.g. up to $500No
Damage to your vehicle caused by an uninsured driverAvailableAvailableAvailableNo
Emergency transport and/or accommodationNoNoAvailable; e.g. $100 per day, $850 in totalNo
Key replacementNoNoAvailable; e.g. $1,000No
Death benefitAvailable; e.g. $5,000Available; e.g. $5,000Available; e.g. $5,000No
Legal liability for injuries or death to other peopleNoNoNoAvailable
Optional extras
Reduced or no windscreen excessNoNoAvailableNo
Variable excessNoNoAvailableNo
Restricted driver discountAvailableAvailableAvailableNo
Roadside assistanceAvailableAvailableAvailableNo

What are extras?

‘Extras’ are inclusions or perks bundled into car insurance policies that are competing for your business. Otherwise known as ‘benefits’, some common extras you may find incorporated into your policy are:

  • Hire car cover. Your insurer may provide you with a hire car when your vehicle is being repaired or replaced.
  • Roadside assistance. Your insurer may waive roadside assistance membership fees upon taking out cover.
  • Replacement keys. Your insurer may cover the cost to replace your keys if you were to misplace them.
  • Windscreen cover. Your insurer may cover the cost of repairs or replacement, including cracks to your windscreen.
  • Personal effects cover. Your insurer may cover the cost to replace your valuables in your car (up to a certain value).

Depending on your insurer, there are various extras available when taking out car cover. Like all insurance products, it’s important to understand the fine print when choosing extras, so that you fully understand what you’re covered for, and how adding extras may affect the cost of your premium.

How do I find great-value car insurance?

You can potentially save on premiums by:

  1. Paying for your premiums annually. As opposed to monthly or quarterly.
  2. Increasing your basic excess. If you increase your excess, you can typically reduce the cost of your premiums. However, be aware that if you need to claim, you will be paying a greater amount in excess.
  3. Place age exclusions. This means you can limit drivers to a certain age (i.e. drivers under 25 or 30). In theory, older drivers are generally more experienced, and therefore, less risky to insure.
  4. Drive less. Some insurers will reduce your premium if you’re a low kilometer driver: typically under 15,000km each year.
  5. Compare often. You might have been on a great value deal a few years ago, but have you reviewed your options lately? Perhaps something cheaper has come along that offers the same benefits, but you won’t know unless you shop around.

Always disclose as much information to your insurer as possible; if you decide to hide your claims history, for example, your cover could be cancelled or future claims could be denied.

What is excess?

Excess is the amount you’ll pay your insurer when you make a claim on your policy. This excess is agreed upon when you first take out the policy. When you make a claim, you will pay this amount, while your insurer will pay the rest of your repair/replacement costs up to the agreed amount on your policy.

There are different types of car excess:

  • Standard excess. Paid out of pocket when you make a claim.
  • Voluntary excess. Paid in addition to your other excess charges, sometimes for a cheaper premium.
  • Age/inexperienced driver excess. A separate excess for less experienced and/or younger drivers.
  • Unlisted driver excess. If you have to claim on your policy, but the driver wasn’t listed on the policy, you may have to pay an additional excess (if you are even covered at all).
  • Additional excesses. Other additional excesses may also apply depending on the product you have chosen.

If you are not-at-fault in an accident, you may not be required to pay an excess. The exception to this rule is when the at-fault party is not identified. For example, say you’re involved in a hit and run and the guilty party is not found or identified, you may still be required to pay the excess.

To confirm all excesses that may apply to you, be sure to check your Product Disclosure Statement (PDS) and Insurance Certificate.

For more information, visit excess explained.

What does liability mean when it comes to car insurance?

Liability refers to the person who is legally responsible, or at-fault, in an accident. For example, you may be liable for third-party damage if you didn’t give way and collided with a vehicle that was already on a roundabout.

Compulsory Third Party (CTP or Green Slip cover) is the only form of car insurance that covers your legal liability if you’re at-fault in an accident where another person is injured or dies.

What qualifies as a classic car?

Classic car insurance is a broad term referring to a product that covers classic, vintage or prestige vehicles. It is broken down into a variety of specific types:

  • VeteranFor car enthusiasts who own automobiles made between 1905 and 1919.
  • VintageCovers cars made between 1919 and 1930.
  • PrestigeFor high-end European or UK-produced sports cars or ‘supercars’ associated with ‘status’ owners.
  • American Classics. Covers the owners of US-made ‘muscle cars’ typically manufactured between the late 1970s – early 1980s.

How much do Australians pay in car insurance premiums?

Many variables determine car insurance premiums, including:

  • age
  • location
  • car model
  • average kilometres driven per year
  • car modifications
  • driving and claim history

With these factors in mind, it’s difficult to calculate average prices when every policy is different. However, to give you an idea of how much car insurance may cost in your area, we completed some quotes through our comparison tool for a 42-year-old female driving a 2010 Mazda 3.

As you can see in the table below, prices for comprehensive policies can vary significantly, which is why it’s important to shop around for a policy that suits your lifestyle.

State/territoryLeast expensive premium (per year and per our panel of insurers)Most expensive premium (per year and per our panel of insurers)Average premium (per year and per our panel of insurers )

Source: Compare the Market quote, quotes produced 27/3/2019 from our panel of insurance providers

N.B. These prices are based on quotes for a 2010 Mazda 3, which is garaged, has no accident or hail damage and hasn’t been modified. All drivers will be 25 years or older. The car is specified for private use, to be driven 15,000km/year by a 35 year old female driver with a rating 1 NCD (no claims discount) for the following postcodes: 4157 (Capalaba, QLD), 2088 (Mosman, NSW), 2902 (Kambah, ACT), 3182 (St Kilda, VIC), 7005 (Sandy Bay, TAS), 6069 (Ellenbrook, WA) and 5109 (Salisbury Park, SA).

What car insurance providers are there in Australia?

For help finding the best car insurance in Australia, view our list of providers listed below. Please note that this is subject to change at any time.

To save time and simplify the process, you can compare numerous policies that are available through our car insurance comparison service. While we don’t compare every provider on this list, you can use our tool to compare policies from some of Australia’s top car insurers – it takes only minutes!

  1. 1300 Insurance
  2. 1Cover
  3. 1st for Women
  4. AAMI
  5. AANT (Automobile Association of the Northern Territory)
  6. AI Insurance
  7. Allianz
  8. ANZ
  9. Apia
  10. Australia Post
  11. Australian Seniors Insurance Agency
  12. Australian Unity
  13. Bank of Melbourne
  14. BankSA
  15. Bendigo Bank
  16. Best Buy Insurance
  17. Beyond Bank
  18. Bingle
  19. Blue Badge Insurance Australia
  20. BOQ (Bank of Queensland)
  21. Budget Direct
  22. Bupa
  23. Cashback
  24. CCI Personal Insurance
  25. CGU
  26. Coles
  27. CommInsure
  28. COTA Insurance
  29. Elder’s Insurance
  30. Eric Insurance
  31. Essentials by AAI
  32. Famous Insurance Agency Pty Ltd
  33. GIO
  34. Guild Insurance
  35. HBF
  36. HSBC
  37. IAL
  38. ING
  39. Huddle
  40. Hume Bank
  41. Kogan Insurance
  42. Latitude Financial Services
  43. Lumley Special Vehicles
  44. MB Insurance
  45. NAB
  46. National Seniors Australian Insurance Holdings
  47. NRMA
  48. Over Fifty
  49. Ozicare
  50. People’s Choice Credit Union
  51. Poncho Insurance
  52. Progressive
  53. QBE
  54. RAA
  55. RAC (WA)
  56. RACQ (QLD)
  57. RACT (TAS)
  58. RACV (VIC)
  59. Real Insurance
  60. Retirease
  61. Ryno Insurance
  62. SGIC
  63. SGiO
  64. Shannons
  65. George Bank
  66. Suncorp
  67. Territory Insurance Office (NT)
  68. Vero
  69. Virgin Money
  70. Westpac
  71. WFI
  72. Woolworths
  73. Youi

Accurate as of 5/3/2019

See all car insurance frequently asked questions

Stephen Zeller, General Manager

Meet our car insurance expert, Stephen Zeller

As General Manager of General Insurance at Compare the Market, 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.

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