Comprehensive Car Insurance in Australia

Understanding the Types of Vehicle Insurance and What They Cover

Jul 17, 2009

Comprehensive car insurance has become expensive in recent years. By understanding what it does and does not cover everyone can find a policy to suit their circumstances.

Car insurance can protect people from monetary loss if their car is involved in any type of accident or if it is stolen. The premiums customers pay for vehicle insurance vary depending on the level of cover they choose, their driving history and the age of the youngest driver who will use the car.

There are three main types of car insurance in Australia. These are Compulsory Third Party or Green Slip insurance (which is required by law for all registered vehicles), Third Party Property Insurance (which covers drivers for damage to other people’s property but not their own property), and Comprehensive Car Insurance.

What is Comprehensive Car Insurance?

Comprehensive Car Insurance has the highest level of cover and is the most expensive type of car insurance. It covers a vehicle for accidental damage, theft and fire and also provides liability cover for damage they may cause to someone else’s vehicle or property. It is most useful to owners of vehicles that are fairly new or in good condition or valuable. Many insurers won’t cover vehicles that have existing rust damage.

It is not necessary to obtain both third party and comprehensive car insurance, as comprehensive car insurance includes a third party component. Comprehensive car insurance includes the cost of crash repairs or replacing a damaged car (up to an agreed value), as well as damage to anyone else's property, even if the insured are at fault.

People with a good driving record and an older car may decide to take out cheaper third property rather than comprehensive car insurance. Nearly 90% of car insurance claims are for collisions (Source:

Insurance Statistics Australia June 99) and some drivers may feel they have a low risk for a collision. Theft claims account for a significantly lower proportion of all claims, but are more costly. This is an important factor to consider for those in areas with high theft rates for vehicles.

What Comprehensive Car Insurance Does Not Cover

In general, comprehensive car insurance policies will not cover for loss or damage as a result of normal wear and tear, rust, electrical or mechanical failure, structural failure, depreciation, accidents caused if the insured vehicle is unroadworthy, accidents caused by a person driving under the influence of drugs or alcohol, and accidents caused by a person unauthorised to drive the car under the policy. There may be other exclusions or limitations specified.

Compare Car Insurance Rates to Save Money

Different vehicle insurance companies have different inclusions and rates, and by shopping around people may be able to make significant savings by comparing car insurance premiums. Even for those who don't shop around, there are other ways to trim the costs. These can include choosing a higher excess, or having an approved alarm or immobiliser installed in the vehicle.

Savings can also be made by combining more than one insurance policy with the insurance company such as home and contents insurance, and by restricting the use of the car to drivers over 25. Most companies also give a discount if insurance is organised and paid via the Internet. Each company has different exclusions or limitations so customers should always read the policy to ensure they know what is and is not covered.

The copyright of the article Comprehensive Car Insurance in Australia in Automotive Insurance is owned by Jo Jackson. Permission to republish Comprehensive Car Insurance in Australia in print or online must be granted by the author in writing.