Comprehensive vs third-party car insurance: Which one do I need?
Car Insurance that covers you against damage to your car and someone else's, or a cheaper third party policy. Find out what’s right for you.
Key takeaways
- Comprehensive car insurance covers damage to your own car and damage you cause to other people's vehicles or property.
- Third-party property insurance covers damage you cause to other people's cars or property, but not damage to your own car.
Third-party fire and theft insurance provides cover if you hit someone else, and also covers your car if it's stolen or damaged by fire.
What's the difference between comprehensive and third party car insurance?
Comprehensive car insurance
The most extensive level of car insurance – and the most expensive. It's the only type that covers accidental damage to your own car as well as other people's. It will also cover the cost of damage to your car from storms, fires and hail or if it's stolen.
On top of this, comprehensive car insurance can cover you for:
- Roadside assistance (sometimes at an additional charge)
- Belongings inside the car
- Towing costs
- Hire car costs
- Emergency travel, accommodation and repairs
- Replacing an older car with a newer model after an accident
- Windscreen replacement (sometimes at an additional charge)
- Legal liability cover
- Lock and key replacement
Third party property car insurance
Protects you from paying for damage to a third party. This means you'll be covered for costs to repair or replace another person's car or property, if you cause damage. It won't cover you for repair costs to your own vehicle.
This is the most basic type of non-mandatory car insurance and is the cheapest.
Third party, fire and theft car insurance
This gives you all the same protection as third-party insurance but with added coverage if your car is damaged by fire or is stolen.
How much does comprehensive and third-party insurance cost?
The cost for each policy type will depend on the insurer you choose. But generally you'll find comprehensive insurance is the priciest, with third-party fire and theft falling in the middle, and third-party property car insurance as the most affordable.
We researched over 30 comprehensive car insurance providers and 19 third party car insurance brands. We found the average annual car insurance premium costs:
- $522 for Third Party Property Damage insurance
- $1,362 for Comprehensive insurance
Is comprehensive or third party insurance better for me?
Comprehensive car insurance
Pros:
- Extensive coverage: Covers damage to your own car and others + incidents like theft, fire, and weather events.
- Extra benefits: Can include extras like roadside assistance, windscreen replacement, and hire car costs.
- Peace of mind: Financial protection in a wide range of scenarios, reducing your out-of-pocket expenses.
Cons:
- Higher premiums: More expensive than other car insurance types.
- More than what you need: You might be paying for features you don't need.
Third-party fire and theft
Pros
- Balanced cover: You get liability protection for damage you cause to other people's property and it covers you for fire damage or theft to your own car.
- Cost effective: Acts as a middle ground between comprehensive and third-party insurance in terms of pricing and features.
Cons:
- Not necessarily cheap: More affordable than comprehensive car insurance, but it may still be a significant expense without covering all scenarios.
- May fall short in disasters: Not designed for protection against natural events like floods or storms unless specified.
- Limited own-car coverage: Does not cover damage to your own car in collisions.
Third-party property car insurance
Pros:
- Cheaper: Generally the cheapest option, ideal for budget conscious customers.
- Liability protection: Covers damage to other people's car or property.
- Good for less valuable cars: If you're driving an older or cheaper car, it still covers you for most potentially expensive risks - damage to other people's property.
Cons:
- Limited protection: Does not cover damage to your own car in most scenarios, and offers no protection against natural disaster, fire, or theft.
- Out-of-pocket costs: You bear the financial responsibility for repairs and replacements of your own vehicle.
- Lender requirements: If you have a car loan, a third-party policy might not meet the insurance requirements of your provider.
At the end of the day, it comes down to your personal circumstances. You should consider your car's value, your own financial capacity, and how willing you are to take on risk before making a decision.
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My wife, a pedestrian, was hit by a car in a hit and run accident. The driver has been found by the police and admits to the incident. Is it best to claim off CTP or his fully comprehensive insurance?
Hi Anthony,
Thank you for getting in touch with finder.
So sorry to hear about your wife.
The driver’s CTP should cover your wife for ongoing medical expenses and loss of income. His comprehensive insurance is only used for damage to his own car, so won’t be of much help for you or your wife.
If you have their insurance details, get in touch with their insurer and let them know what’s happened – you might need the police report for further evidence.
If you’re unsure who their insurer is, get in touch with your state’s insurance regulatory authority and they can follow this up for you.
Best of luck.
Please feel free to reach out to us if you have any other enquiries.
Thank you and have a wonderful day!
Cheers,
Jeni