Unlike other countries, in Australia you insure the car, not the person. You are also legally required to have compulsory third party (CTP) insurance. CTP protects you if you crash into another driver and they have to go to hospital for injuries; it covers their hospital expenses. However, you should consider getting more cover. You may also need an International Driving Permit (IDP) if your native language is not English.
There are many cost effective ways to drive around Australia. For shorter trips, a rental car could be a good option. For longer stays, you may be more interested in buying a car and insurance. Depending on your needs, there are a range of car insurance options available from comprehensive to third party policies. You can read about the difference between each below.
This is the only level of car insurance that covers damage to your own car as well as other people's vehicles and property. Additionally, you'll be covered if your car is damaged by hail, fire or storm or if it's stolen or vandalised. It can also help pay for key replacements, a hire car if yours is stolen and more.
This covers costs if you damage someone else's vehicle or property and can pay to repair or replace your car if it's damaged by fire or stolen. However, it doesn't cover you for damage to your own car due to an accident, storm or flood.
Often called Green Slip insurance, compulsory third party is mandatory for every registered driver in Australia. In many states, it's included in your car registration. It helps cover compensation costs, such as hospital expenses, if you kill or injure someone in a car accident. It won't cover your car or someone else's car.
Finding cover for a backpacker is relatively straightforward. You'll need to make sure you have a main address you can put down, as all insurers require you to have one. This is mainly so that your insurer knows where your car is usually kept, helping them calculate your premium. Compare car insurance options.
Driver's license requirements
You must have a valid driver's license on you at all times while driving. Whether you can use an overseas driver's license depends on which state you're in and how long you'll be staying. In all cases, you must meet the following criteria:
Your overseas license must be current and valid. Any conditions that apply to your overseas license will also apply in Australia.
You will need a certified English translation or an International Driving Permit (IDP) if your license is in a language other than English.
New Zealand residents are treated as interstate drivers for licensing purposes. If you have registered your vehicle in a different state or if your visa status changes to permanent, you are subject to interstate driving rules.
The interstate license rules for permanent visas apply when you are officially a resident of that state, regardless of whether you are in it at the time.
If your overseas license expires during your visit, you should apply for a local license.
While every effort has been taken to ensure the accuracy of this information, you should check for information specific to your situation and location at the relevant website.
Best car insurance for backpackers
Every backpacker has different travel plans when visiting Australia so there's no way of determining a policy that is best for everyone. However, most backpackers plan on doing quite a bit of driving on their trip, so it's worth considering getting cover for the following:
Break down cover: If you're backpacking across Australia in a car, it's highly likely you're going to be buying a second hand car. While this is an affordable way to see such a vast country, there's always a chance something could go wrong with your car. Even the best second hand cars can find Australia's huge stretches of road a struggle, so the best car insurance for you could include features like roadside assistance, emergency repairs cover and emergency cover. This can get you out of a sticky (and potentially expensive) situation quickly.
Bad weather: Anyone who isn't from Australia is in for a shock when they see how quickly the weather can turn on its head. Having storm cover, hail damage, fire and flooding is great to have if you will depend on your car while travelling.
Contents inside the car: Backpackers with cars usually keep most of their belongings inside their car when moving across the country. If you have any expensive items – phones, laptops, clothes, passport – getting cover for them might be a wise choice.
Accidents: Comprehensive cover is the only policy that will actually protect your car in an accident. If your car is very cheap, this might not be a concern to you. However, even if it is, repairs could be expensive, which a comprehensive policy could help cover.
Hitting an animal: It's actually very common for cars to hit kangaroos on Australia's more remote roads. This can do serious damage to your car, so it might be worth making sure it's covered in your policy.
Look for online discounts. Many car insurers offer sign up discounts of 10% or more for new customers. This could translate to over $100 in savings.
If possible, nominate anyone over 25 as the main driver. Insurers assume that over 25s are safer drivers and will therefore give you a cheaper premium.
Choose your extras. Try to find policies that let you rule out the options you might not need, like hire car cover, and only include the most important features.
Drive a cheap, but safe, car. The less your car costs and the safer it is, the less you pay for car insurance.
FAQs
This will depend on how long you plan to stay in Australia and every state has different rules. It's best to visit the state government website to find the specifics.
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Gary Ross Hunter is an editor at Finder, specialising in insurance. He’s been writing about life, travel, home, car, pet and health insurance for over 6 years and regularly appears as an insurance expert in publications including The Sydney Morning Herald, The Guardian and news.com.au. Gary holds a Kaplan Tier 2 General Advice General Insurance certification which meets the requirements of ASIC Regulatory Guide 146 (RG146).
Hi Becky,
Once you know what car you’ll be driving and where you’ll be staying, you should be able to start getting quotes. If you’re unsure about how to answer any of the questions in the forms online, you can always give the insurer a call and they’ll be able to help you.
Good luck!
Peta
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hi, how can I find a car insurer that will cover me whilst on working holiday visa subclass 417?
Thank you :)
Hi Becky,
Once you know what car you’ll be driving and where you’ll be staying, you should be able to start getting quotes. If you’re unsure about how to answer any of the questions in the forms online, you can always give the insurer a call and they’ll be able to help you.
Good luck!
Peta