Getting around Australia can be much easier with a car, but there are some insurance requirements you'll need to consider first. In Australia, you insure a car, not a person. This means that you just need to make sure that whatever car you're driving has insurance, rather than you holding it yourself. It depends on how you plan to drive:
Owning a car
You'll need to get at least what's called CTP insurance from an Australian car insurer. This covers you from third party damage e.g. injuring someone else in a car accident.
Borrowing someone else's car
For just a few uses, the owner needs at least CTP insurance and you may need to be over 25. If you plan on borrowing a car regularly, the owner may need to list you on their insurance.
Renting a car for the short term
You'll need to get car insurance from the rental company. This will cover you for the incidents that happen in the rental car. Learn more about Car Rental Excess Insurance.
How can this guide help you?
Every car needs CTP or else it's not allowed on the road in Australia. In addition to that, you can add any one of the following levels of insurance on top of the car's CTP:
- Third party property damage (TPPD). Covers damage you cause to other people's property, like their car, fence, pets and homes. Everyone should have at least this form of cover, because the cost of damaging someone's stuff can be astronomical. Just imagine totalling someone's Maserati!
- Third party fire and theft (TPFT). Adds to a bit of extra protection compared to TPPD by offering some protection for your car: specifically against theft and fire damage.
- Comprehensive car insurance. The highest level of insurance available, covering everything TPPD and TPFT does plus loads of other damage to your car including hail, flooding, vandalism, damage from accidents you cause and more. If you borrowed money to buy your car, your lender might require you to have comprehensive cover.
Need to know
When you get car insurance in Australia, you are buying insurance for a particular car, not a particular person. So if you don't own the car you're driving, you'll need to make sure the owner has a level of insurance you're comfortable with and that their policy will cover you. Same goes for any car your drive.
Not all international drivers will have the same needs. You might only be here for a few weeks and simply need to borrow someone else's car. Or you're here for a year and plan on buying your own. What follows is a breakdown of how you should approach car insurance based on the following situations:
- You're borrowing someone else's car
- You're renting a car
- You're buying your own car
What if I'm borrowing someone else's car?
If you're borrowing a friend's car, you'll need to make sure that:
- They have additional insurance. If they only have CTP, you won't be covered if you're in an accident and damage their car or someone else's. You'll want them to have at least third-party property damage in case you hit someone else's car. However, if your friend has a flashy car, you'll probably want to make sure they have comprehensive cover in case you damage it.
- Their policy allows unlisted drivers. If your friend's car bans unlisted drivers (i.e. drivers that aren't specifically named on the policy), the insurer can deny any claim you're responsible for. Most policies will cover unlisted drivers but some don't. Double check just to be safe.
- You're aware of any excess that applies. A policy's excess is the amount you pay out-of-pocket if you need to claim. Unlisted drivers will often have to pay an additional excess on top of the standard excess. If you're under 25, the additional excess can be even higher. If your friend doesn't have a level of insurance you're comfortable with, you can ask them to increase their level of cover and split the payments with you. Otherwise, you can take out your own insurance on the car but if your friend's policy covers any of the same things yours does, you can't claim twice. Obviously this will be the more expensive option.
What if I'm renting a car?
If you're renting a car in Australia, it will come with its own insurance that will cover you for the full range of injuries and damages possible. But believe it or not, that might not be enough.
These policies usually come with absurd excesses, meaning if you have to claim, you will be forking out as much as $3,000 of your own cash out-of-pocket.
The answer here is car rental excess insurance. This is a special form of insurance that will reduce your excess to something a lot more manageable, like $300 or even $0 depending on the policy you choose.
Car rental excess insurance is usually optional and there are a few ways to get it:
- Through the hire car company itself. This is quick and convenient but usually more expensive than other options.
- Through a standalone car rental excess insurance company. This is a cheaper option and it may even cover you for damages your rental insurance won't, like windscreen damage.
- Through your travel insurance. If you're in Australia temporarily and you're using travel insurance, check to see if your insurer offers this cover. Sometimes they include it automatically and other times they offer it as an optional add-on.
What if I'm buying a car?
If you're buying a car in Australia, your insurance obligations are no different than a typical Aussie's. To get your car onto the road, you need make sure that:
- You have a recognised driver's license
- Your car is registered with your state's department of transport
- You have at least Compulsory Third Party insurance (CTP) to cover injuries you could cause to others
On top of that, you'll want to have one of the additional optional forms of insurance like third party property, third party fire and theft or comprehensive to protect other people's property and/or your own car.
As a visitor, there are two main reasons why comprehensive car insurance would be well worth the cost:
- You're driving an expensive car. Comprehensive is the only policy that covers the full range of damage to the car you're driving including accidents you cause, vandalism, theft, fire, storms and being hit by an uninsured driver. You don't want to be out thousands of dollars if one of these destroys the car.
- You're driving long distances. Comprehensive is the only policy that pays to put you up in a hotel, take you back to your primary residence and/or give you a hire car to use while the other car is in the shop. If you're far from home, these expenses can add up quickly unless you have comprehensive car insurance.
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:
How long will my international licence work in Australia? (option 2)
Most states will require you to switch over to a state license after a certain amount of time. This differs by state and by your residency situation. Here is how long you can drive in each state before your overseas license is no longer valid, even if it's still valid in your home country. At that point, you'll need to get a state-issued license.
|New South Wales||3 months after arriving in NSW or becoming an Australian permanent resident, whichever comes later||3 months after taking up residence in NSW||3 months after arriving in NSW|
|Victoria||6 months after taking up residence in VIC or getting your permanent resident visa, whichever comes later||3 months after taking up residence in VIC||No limit|
|Queensland||3 months after taking up residence in QLD or getting your permanent resident visa, whichever comes later||3 months after taking up residence in QLD||No limit|
|South Australia||90 days after taking up residence in SA or getting your permanent resident visa, whichever comes later.||90 days after taking up residence in SA||No limit|
|Western Australia||3 months after arriving in WA||3 months after taking up residence in WA||3 months after arriving in WA|
|Australian Capital Territory||3 months after taking up residence in ACT||3 months after taking up residence in ACT||3 months after taking up residence in ACT|
|Tasmania||3 months after arriving in TAS||3 months after taking up residence in TAS||No limit|
|Northern Territory||3 months after taking up residence in NT||3 months after taking up residence in NT||Within 3 months after taking up residence in NT|
Here are some tips to help keep you safe while you're exploring Australia:
- Stay left. Australia is one of only a handful of countries where you drive on the left-hand side of the road. Keep to the left and try not to fall into old habits, especially on long empty stretches of road without other traffic to remind you.
- Overtake on the right. When there are two or more lanes of traffic driving in the same direction, the left-most lane is the slow lane. If you overtake someone, you must overtake on the right or you could be fined.
- Stop, revive, survive. Fatigue is one of the main killers on Australian roads so make sure to take frequent breaks if you're driving long distances. If you see a sign that says "stop, revive, survive", it means there's a rest area coming up where you can stretch your legs, take a bathroom break and grab a coffee.
- Think in terms of the metric system. Speedometers, street signs and almost everything else is measured using the metric system. Driving 100 kilometers per hour is the same as driving 62 miles per hour, so don't be alarmed by the higher numbers.
- Watch out for speed cameras. They're everywhere in the city and if they nab you speeding or running a red light, you can expect a fine in the mail.
- Learn how to use roundabouts. These help direct traffic at intersections where there are no lights or stop signs. If you've never used a roundabout before, just remember that when you approach one, you are required to give way to any vehicle approaching from the right. If the coast is clear, you can cruise right through.
- You can't always pay tolls with cash. Many toll roads don't accept cash. Depending on which state you're in and how much you'll be driving, you'll either need to buy a pre-paid trip pass or register for a toll account that will deduct your trips from your bank account every fortnight or month.
- Be careful when driving in isolated areas. Australia's outback contains many long treacherous roads and it can be very dangerous to drive long distances without the right supplies. Avoid long trips through the outback if possible. If you can't avoid it, tell someone where you'll be driving, make sure your car is in good condition, take plenty of water and stay near your vehicle if it breaks down.
- Take advantage of "servos". This is 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.
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