Are you planning a backpacking trip in Australia and need a car? Find out what car insurance you will need.
If you're looking to adventure Australia and experience all of it's beauty, public transport just won't cut it. The most cost effective way to see Australia is is to grab yourself a cheap car and put on third party property car insurance. This type of insurance will cover you if you crash into someone else and usually only costs around $25-$35 a month.
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Your car insurance options
Compulsory third party (CTP) insurance is mandatory. This covers you for medical costs resulting from car accidents. However, it doesn’t include any cover for property damage liability. For that, you’ll need one of the other three types of cover. Additional cover isn’t mandatory, but it’s fairly cheap, extremely useful and strongly recommended.
- Third party property only. This is the cheapest additional cover available. This only covers your liability for third party property damage. Depending on the policy, it can also include a few extra options like towing cover.
- Third party with fire and theft. This provides low- to mid-range cover for third party liability costs you might incur as well as fire and theft cover for your own car. The available options and extras will depend on your policy.
- Comprehensive car insurance. This covers you for third party liability costs and also covers damage to your vehicle from floods, storms, fires, theft and more. It also tends to have the widest range of extra options, including roadside assistance, emergency repair and accommodation cover, which can be near-essential if you are driving through the outback.
Which one should I get?
You are not legally required to get additional cover, but going without means that the slightest accident could cause severe financial stress. Scratching a more expensive car, clipping a petrol pump or anything else might blow out your travel budget with a significant added cost.
Comprehensive car insurance is a popular option. The main cost is third party liability, which all the policies have, and a lot of the available discounts are for comprehensive cover only. Based on average premiums from three prominent Australian insurers, after adding a 20% online discount you might find the following prices:
- $720 for a year of comprehensive cover
- $520 for a year of basic, third party only car insurance
The choice is entirely yours, but comprehensive car insurance is widely used for a reason.
- Comprehensive car insurance is the only type of cover that protects your vehicle from a wide range of damage, whether it’s fire, theft, flooding, storms, vandalism or more. If something happens to your car with only basic cover, your trip might be over. If you plan on travelling all over the country, this type of cover can deliver the right cover for all seasons.
- Comprehensive car insurance policies will often include roadside assistance and emergency repairs cover as well as emergency cover. Being stranded in the outback can be fatal, but with the right policy you don’t have to worry about calling for help because your insurance covers the costs.
- Options for excess-free windscreen, glass replacement and more are available. By customising your policy or by looking for one with suitable options, you can get some useful additions. These benefits may not be available with the more basic policy types.
To get a sense of the price difference, you can get a quote for third party only insurance and compare it to a comprehensive car insurance quote.
When you do, remember that there are ways to reduce the cost of car insurance, and that many of these will only be available with comprehensive cover.
How to get cheap car insurance
- Buy your policy online, instead of over the phone or any other way, for premium discounts of around 20% or more. This is only available with comprehensive car insurance.
- If possible, nominate anyone over 25 as the main driver. Insurers assume that over 25s are better drivers. It might not be the case for you, but it’s statistically true and you might be able to take advantage of this.
- Choose your extras. Try to find policies that let you rule out the options you might not need, like trailer 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.
Play your cards right and the cost of comprehensive car insurance can be close to the amount you’ll pay for third party only cover.
CTP insurance and licensing in Australia
How you get your mandatory CTP cover depends on where you register your vehicle.
In New South Wales and Queensland, you need to take out cover through an approved state insurer. There may be differences between the types of cover as well as the price.
- Contact one of the six approved insurers for New South Wales.
- In Queensland, you take out CTP insurance at the time of registration, and can choose from one of four approved insurers for Queensland.
In Victoria, South Australia, Western Australia, Tasmania, and the Northern Territory, compulsory third party insurance is included as part of the vehicle registration process, and your premiums are part of the fee. You do not need to compare cover or policies.
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.
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