Planning on hitting the road during your travels in Australia? Find out what car insurance you need as a visitor in Australia.
One of the most distinctive things about Australia is the long, open expanses between cities. If you want to see the country at your own pace and choose your own destinations rather than having to go wherever the tour bus takes you, driving is the way to do it.
Whether you’re renting a car, borrowing a friend’s or buying one cheaply just to use while you travel, you will need some form of car insurance.
In all cases, you must have a current and valid international driver’s license, although the laws for driving on these vary depending on which state you are in at the time.
Need car insurance? One of these policies could help
What are the different types of car insurance in Australia
There are several different kinds of insurance that you should be aware of.
Medical liability insurance: This type of cover, known as compulsory third party insurance, is mandatory for all drivers in Australia. It covers the medical costs of injuries sustained on the road, including injuries you might cause other drivers. It does not, however, cover any property damage liability.
- If you are borrowing a car: If the car is fully up to date with registration, it will most likely have an active CTP policy.
- If you are renting a car: It will have CTP insurance.
- If you are buying a car: Check online (for free) whether the vehicle is currently registered and whether it has CTP insurance. If not, you will need to get CTP insurance.
Property liability and damage insurance: All consumer car insurance policies in Australia will include cover for any property damage liability costs, typically around $1 million or more. It is not mandatory, but it is strongly recommended as the bare minimum. There are three types of car insurance to choose from:
- Third party property only: Cheap car insurance for third party property damage liability only and nothing else.
- Third party fire and theft: Damage liability, as well as cover for car theft and fire damage. It does not include cover for collision or accident damage, so if you only have this and you’re hit by an uninsured driver, you’re on your own.
- Comprehensive car insurance: The highest level of insurance available that will cover damage liability, collision, fire, theft, hail, flooding, vandalism and more. It will frequently include extra benefits such as free roadside assistance, cover for towing costs, emergency accommodation cover and more.
- If you are borrowing a car: It will have whichever form of insurance the car’s owner has taken out. However, it may not necessarily cover you to drive it, or an additional excess may apply.
- If you are renting a car: It will typically have comprehensive cover through the rental company, but if something happens you can expect to be charged an exorbitant excess. You may not need car insurance, but you should strongly consider rental car excess insurance.
- If you are buying a car: You can choose your own form of cover. Remember that you will only be covered for collision and accident damage to your car with comprehensive policies.
The car insurance market down under might also be a lot smaller than what overseas visitors are used to. With fewer insurers competing for business, you might be surprised at the discounts they are prepared to offer. Get multiple quotes, ask if they’re willing to price match and look for deals.
With the balance of cost and cover, and the number of options available, comprehensive car insurance is one of the more popular choices. Many discounts, as well as pay-as-you-drive policies and other short-term car insurance policies are only available with comprehensive cover.
Is comprehensive car insurance worth the cost?
You might not need a comprehensive policy if you’ll only be driving short distances, but for overseas visitors planning on driving through the outback, or otherwise travelling long distances around Australia, comprehensive car insurance is a matter of safety.
- Comprehensive car insurance is the only policy type with collision cover.
- Without comprehensive car insurance there is a very real chance of being stranded in an isolated location after an accident.
- Many comprehensive car insurance extras are tailored for long distance travel, including emergency accommodation cover.
Some of the specific things you are generally only able to get covered for with comprehensive car insurance include:
- Flood, hail or storm damage
- Malicious acts or vandalism
- Accident or collision
- Possessions cover for your belongings inside the car
- Windscreen and glass claims, with options for excess-free claims
How do I actually compare cover?
When deciding between policies there are some specific features to look at. Make sure you understand how a policy deals with each of the following to make sure you understand your cover and costs.
- What does the policy cover? Two policies of the same type can still carry different types of cover. Look at the core policy benefits, the optional inclusions and the exclusions of each policy. You might broadly be covered for all vehicle damage, but it will need to be damage that results from something that’s covered by your policy.
- How much are you covered for? The sum insured of your policy will be the most that is payable in the event of a total loss. Depending on the policy this might be the market value of the car, including depreciation at typical market rates, or an agreed sum that should generally be enough to cover the full cost of the vehicle.
- Repair and replacement details. It can be worth paying specific attention to the terms of repairs and replacements laid out in your policy. For example, one insurer might replace a car that’s less than 3 years old with an “as new” equivalent, while another might only offer this for a limited time, or with other requirements around the type of vehicle.
To compare the costs, you want to look at:
- The premiums. These are your ongoing monthly (or fortnightly or annual) expenses.
- The excess. This is the amount that you’ll need to pay when making a claim. Sometimes the excess will be different depending on the policy and the nature of the claim. For example, a comprehensive policy might let you make one excess-free claim for broken glass per year. Often there will be more than one excess in the event of a claim, such as a base excess and then an additional cost because the driver at the time was under 25. All applicable excesses will be laid out in your product disclosure statement.
What do I need to apply for a new policy?
In order to take out a policy you will need to meet all the eligibility requirements. Generally, as long as you have a driver’s license or international equivalent equal to at least a provisional license (not a learner one) you will be able to take out a policy. However, you will need to be able to provide appropriate details which may include:
- A mailing address in Australia
- A contact phone number or email address
- Vehicle registration details, which may include CTP insurance
- A “pink slip” which proves vehicle roadworthiness
What exactly is car rental excess insurance?
When you rent a car, the rental company will often have its own car insurance that covers you to drive. This means you don’t have to take out car insurance, but in the event of a crash, or even minor damage to the car, you may be liable for an exorbitant excess.
Essentially you are charged a fee, usually thousands of dollars, if you damage a rental car. Sometimes the excess you are charged will clearly more higher than the cost of damage. For this reason, it can be a good idea to get a fairly cheap rental car excess insurance policy.
As the name suggests, this is insurance that covers the rental excess if you find yourself on the hook when your rental car is damaged. Policies can start from a few dollars a day, and cover thousands of dollars of excess costs.
Should I just take out insurance with my rental company?
Car renters will often give you an “excess waiver” option, which means you won’t be liable for the excess, but will be paying more to rent the car. Or, they may offer to sell you a rental car excess insurance policy, or other type of car insurance.
Depending on how much the rental place charges for this option, it can be significantly cheaper to get your own rental car excess insurance instead. This type of cover is available whether you’re renting a car, a van or even a full motorhome or campervan.
If you are being offered a policy, or excess waiver option, on the spot then it’s reasonable to assume you can find more value for money elsewhere. Especially if your travel insurance already covers it, or if your credit card offers complimentary cover of hire car insurance.
How to get CTP insurance in each state
How to get your mandatory CTP cover depends on which state your vehicle is registered in.
In New South Wales and Queensland you will need to take out cover through an approved state insurer. There are different types of policy available, and there are different prices. To find the cheapest cover, you should get quotes from each provider. The two different types of policy are:
- Standard CTP insurance: Covers you when you are injured by another driver who is at fault. If you are found to be at fault, it will generally only your medical costs for specific, catastrophic injuries.
- CTP insurance with at fault driver cover: Not all insurers offer this option, and it costs more than standard CTP insurance. With it, you will be covered for additional medical expenses if found to be at fault, instead of only for extremely serious injuries.
Contact one of the six approved insurers for New South Wales, and take out cover separately to vehicle registration as you would with any other kind of insurance. In Queensland, you take out CTP insurance at the time of registration, and can choose from one of the four approved insurers for Queensland.
In all the other states, Victoria, South Australia, Western Australia, Tasmania, and the Northern Territory, compulsory third party insurance is included as part of the vehicle registration process, with premiums being included in the fee. You do not need to compare policies, as there are no differences between price or cover.
License requirements for visitors to Australia
What you need to know about driving in Australia with an international driver’s license
- Conditions that apply to your current license (eg, cars only) will also apply when you drive in Australia.
- Your international driver’s license must be current and valid.
- You will need a certified English translation, or 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 your vehicle is registered 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 type 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.
It can be a good idea to check for more information specific to your situation and your destination at the relevant state road authority website.
|State||With Temporary Visa||Interstate and New Zealand Licenses||More information|
|New South Wales||Can use a valid international license for up to 3 months.|
Can apply for a temporary visitor overseas license which can be used indefinitely, if staying for longer than 3 months
|NZ license holders must transfer licenses with 3 months, regardless of whether temporary or permanentInterstate license holders who intend to stay in NSW permanently should convert their license||Learn more|
|Queensland||Can use an overseas license indefinitely|
International licenses only qualify you to drive class C type vehicles (under 4.5 gross tonnes, carrying no more than 12 people)
|Can use your interstate license indefinitely with temporary visas|
Must transfer your license within 3 months of becoming a permanent resident of QLD
|Victoria||Can use a valid overseas license indefinitely||Can use an interstate license indefinitely with temporary visas|
Must transfer an international license within 6 months of residencyMust transfer an interstate or NZ license within 3 months of residency
|South Australia||Can use a valid overseas license indefinitely||If you become a permanent resident of SA, you have 90 days to transfer your license||Learn more|
|Tasmania||Can use a valid overseas license indefinitely||Can use an interstate license for up to 3 months|
Must transfer when staying in TAS for more than 3 months, whether or not you are becoming permanent
|Northern Territory||Can use an overseas license for up to three months.|
Can apply for an extension, granted on a case by case basis, if staying for more than 3 months and less than 12 months.
Must transfer your license if staying longer than 3 months without an extension being granted.
|Can use an interstate license for up to 3 months.|
Must transfer when staying in NT for more than 3 months, whether or not you are becoming permanent
|Western Australia||Can use a valid overseas license indefinitely||Can use valid interstate license indefinitely|
Must transfer your license within 3 months of becoming a permanent resident of WA
Ten tips for driving in Australia
For a smoother trip, there are a few things you might want to bear in mind.
- Stay left. Australia is one of few countries to drive on the left-hand side of the road. On long empty stretches of road, without other traffic to remind you, it’s all too easy to fall into old habits. This is when accidents happen.
- Overtake on the right. The right lane is the overtaking lane. While driving, you may be fined for overtaking on the left. The “stay left but pass on the right” rule also applies to sidewalks and escalators.
- Stop, revive, survive. In Australia, these signs translate to “free coffee”. Fatigue is one of the main killers on Australian roads.
- Use metric. Speedometers, street signs and almost everything else is measured using the metric system. The larger numbers of the metric system (100 kilometres is equal to 62 miles) also give you the psychological edge of feeling like you’re going faster.
- Speed cameras are everywhere in cities. It’s the easy way to enforce speed limits. If you speed you might receive a fine in the mail.
- Know how to use roundabouts. These might not be common where you’re from. Give way to anything coming from the right and go when it’s clear.
- You can’t always pay tolls with cash. Prepaid passes can save you a lot of trouble. Simply affix the pass to the inside your windscreen.
- Be careful when driving in isolated areas. In Australia, it sometimes seems like every year brings new stories of tourists trying to cross the outback with no water, but plenty of beer. This is a potentially fatal mistake.
- Take advantage of “servos”. Short for service stations, or gas stations. When you see a sign saying “last service station for 200km” you should fill up. It’s not just a marketing gimmick.
- Drive carefully on rural bends. This is where you can get speed limits of over 100km/h, coupled with plenty of blind turns and narrow roads. Drive to the conditions and don’t feel obligated to maintain the speed limit.