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Comprehensive vs third party car insurance

Trying to pick a policy? Here's a breakdown of comprehensive and third party car insurance and which one might be best for you.

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There are two main types of car insurance options: comprehensive car insurance and third party car insurance. Each provides different levels of cover and varies in price. So which one is right for you? Let us break it down to make deciding easier.

What's the difference between comprehensive car insurance and third party insurance?

Not sure whether you should be opting for comprehensive or a third party policy? Here are the core differences between the two:

Comprehensive car insurance

As the name suggests, comprehensive car insurance is the most extensive car insurance option available. It can cover the cost of damage to your car caused by accidents, theft, weather events (such as storms, fires and hail damage) and more. It also protects you financially if you damage someone else's car or property. On top of this, comprehensive car insurance can cover you for:

  • Roadside assistance
  • Belongings inside the car
  • Towing costs
  • Emergency travel, accommodation and repairs
  • New for old car replacement

Third party property insurance

While comprehensive car insurance covers you for damage to your car and damage to someone else's car or property, third party property insurance only covers you for the latter. If your car is stolen, damaged in an accident, fire, or weather event, you'll have to pay for repairs or a car replacement yourself.

Keep in mind that third party car insurance is different to compulsory third party (CTP) insurance, sometimes referred to as Green Slip. CTP is a legal requirement and covers you for liability. In other words, if you or anyone else who drives your vehicle injures someone in a motor accident, it covers you for the legal costs.

Which is right for me?

That depends on what you're looking for. Here's a breakdown of who comprehensive car insurance and third party car insurance might be suitable for.

  • Third party car insurance could be a good option for people looking for cheaper comprehensive car insurance, but be wary that it offers little to no protection for your own vehicle. It can be suitable if you're driving an older or less valuable car though as it still covers you from the most potentially expensive risks, like someone else's vehicle or property. You'll just be running the risk of potentially being unable to afford to repair your car if something does go wrong.
  • Comprehensive car insurance is the cover you get if you want peace of mind. Not only does it provide you with cover for third party damage and damage to your own vehicle, it also insures you for fire, theft and other insured events. You also usually get a range of other benefits like towing, windscreen replacement and new for old car replacement. It's a good choice for people with more expensive cars, or for one you are still making payments on, and for anyone that wants peace of mind knowing their finances won't take a hit, even if their car does. Some car loans may require you to take out comprehensive cover.

What's the cost difference between the two?

The cost difference can vary a lot depending on the provider you use, so it's definitely worth shopping around. To make deciding easier, check out the comparison table below.

BrandThird Party OnlyComprehensiveApply
Coles$234.02$388.32Get quote
Bingle$266.37$519.37Get quote
AAMI$353.01$723.17More info
Budget Direct$236.85$725.64Get quote
Virgin Money$246.32$754.67Get quote
GIO$360.58$836.07More info
Suncorp$580.24$939.55More info
NRMA$811.00$1,315.68More info
CGU$246.63$1,633.59More info
QBE$335.97$2,054.44More info

To determine this estimated cost, we sourced quotes using this profile:

  • Female driver born 1/1/1980
  • Silver 2016 Ford Falcon 2.0L Auto
  • Comprehensive car insurance
  • Safe driver with no claims made in the past 3 years
  • Drives 10,000-15,000 km per year
  • Adjusted excess to $850 where possible
  • Driver located in Sydney
  • Policy starting 22/01/2020

Your cost will differ depending on your circumstances. Some things that can affect the cost of your quote include your gender, the type of car you drive, the colour of the car, how long you have been driving, the amount of cover you need, plus more. Be sure to read the PDS to find cover that suits you.

Should I downgrade my comprehensive car insurance?

It might make sense to downgrade your car insurance for something more affordable, but before you do so, consider the following questions.

  • What's the value of your car? If your car is cheap, then comprehensive car insurance might not be worth it. However, this is only if your annual car insurance premium and excess outweigh the value of your car. Take into consideration how much it would cost to repair your car if something went wrong. Comprehensive car insurance might still be the more affordable option.
  • How often do you use your car? If you don't use your car very often, then comprehensive car insurance might seem like a needless expense. But it also puts you at risk of being seriously out of pocket should you damage your car. If you still want peace of mind with comprehensive cover, then pay as you go car insurance might be a better option.
  • Can you afford to replace your car or get by without it? Imagine an accident writes your car off. Could you afford to replace it? And importantly, could you get by without it? Comprehensive car insurance can provide you with a hire car if you're in an accident, ensuring you can still get to work and do your day to day tasks.
  • Are you paying a car loan? In some cases, you're not able to get rid of your comprehensive car insurance without voiding the conditions of your loan. Regardless of the conditions, it's also a risky financial move. If you were involved in an at-fault accident, then you could end up without a car and still have to pay the loan off.

What's the difference between third party policies?

There are two third party policies you need to know about. These are:

Third Party Property Damage

Third party property damage car insurance covers damage you cause to someone else's vehicle or property. So if you crash into someone's new car, your insurance will pay the repair costs. But that's about all it covers you for.

Third Party Fire & Theft

Third party fire and theft is usually more expensive than third party property because it gives your own car some protection. A typical third party fire and theft policy covers you for:

  1. Damage to someone else's property caused by your car
  2. Damage to your car that is caused by fire or theft.

Third party fire and theft can be a good intermediate option if you don't want to pay the premiums for full comprehensive cover but want some protection for your own car.

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2 Responses

  1. Default Gravatar
    AnthonySeptember 12, 2018

    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?

    • Avatarfinder Customer Care
      JeniSeptember 13, 2018Staff

      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

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