Trying to pick a policy? Here's a breakdown of comprehensive and third party car insurance and which one might be best for you.
The perfect car insurance policy would probably be free. But since that isn’t really an option you’ll need to look at cost vs cover instead.
Let's break it down...
Do you want the full package, or just the essentials?
- Third party car insurance: The all-important liability insurance.
- Comprehensive car insurance: The full package. If it can make a mess of your car or your bank account, comprehensive insurance might be able to cover it.
Spot the difference
|Third party car insurance||Comprehensive car insurance|
|Covers third party liability?||
|Covers accident damage?||
|Covers fire, flood, earthquake, storm, hail and similar?||
What's the cost difference?
|Third Party Property Damage||Comprehensive|
- We averaged together the cost of a male and a female policy, both born on 1/1/1983
- 2016 Ford Falcon
- Third party property car insurance & comprehensive insurance
- Lived in Sydney, NSW
- Drives 10,000 - 15,000 kilometres per year
- Adjusted excess to $600-$700 where possible
- Safe driver with no claims made in the past 3 years
- Quotes sourced on 20 November 2018
Compare comprehensive VS third party cover
What exactly is third party liability insurance?
If you rear-end a BMW, then the BMW driver is the third party. The liability is your obligation the cover the cost of damage.
Third party liability insurance can pay for your liability on the road. It’s the cheap “essential” type car insurance. It’s not mandatory like a green slip, but it’s still a good idea.
That’s because liability can cost a lot more than your car. Say you have a heart attack while driving and plow into a mansion.
Maybe it wasn’t your fault per se, but legally it was and you might have to pay for the damage.
Without liability insurance that could mean a lifetime of debt and garnished wages. And possibly a second heart attack when you get the bill. With liability insurance that could mean filling out some paperwork instead.
Just as useful, liability insurance might also let you “borrow” a high powered corporate legal team if some jerk pulls an insurance scam or otherwise tries to hold you liable for property damage.
It makes sense. Sometimes the insurer can save money by fighting a claim or reaching a settlement rather than paying for the liability. With liability cover you and your insurer have the same goals.
That’s exactly why a car insurance policy typically tells you not to admit to any guilt or liability after an accident. It’s so a pack of lawyers can defend you more easily if it comes to it.
What exactly is comprehensive car insurance?
Comprehensive car insurance includes liability insurance as above. It also covers damage to your car.
The main kind of damage is probably accident damage. But if needed, comprehensive cover may also pay out for floods, earthquakes, fire, theft, falling tree branches or being hit by a falling meteor on the freeway. All the usual driving hazards.
There are some catches though. You probably won’t be able to claim for a punctured tyre for example.
There’s also the excess to worry about. This is basically a flat sum that you’ll need to pay when making a claim. It’s designed to cover administrative fees, prevent customers from claiming every single nick and scratch, and to generally make you think twice before claiming.
Are there any other kinds of policy?
Between the two you’ll find third party liability insurance with fire and theft cover. This is exactly what it sounds like.
Fire and theft are two of the most common types of car insurance claim, other than accidents, so this might be a useful blend.
What else is covered?
You can also find a range of other benefits with car insurance. As expected, you’ll typically find a lot more with comprehensive than the other cover types.
These can include complimentary roadside assistance, lock and key replacement after theft, a rental car following a claim and many more.
Third party only policies are often a bit sparse on the extras, with the exception of an “uninsured driver extension.”
This is a limited level of damage cover for your car, usually around $3,000 to $5,000, usable in one specific situation; when a driver without any third party liability insurance of their own is found at fault for an accident and damage to your car.
They’ll need to be found at fault though. This usually means you need to get their details like name, address and contact number.
But for obvious reasons, a driver without insurance might not be too keen on stopping and swapping insurance details after an accident. So good luck with that.
Which is best?
It all depends.