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Do I need car insurance in Australia?

Yes, CTP insurance is compulsory in Australia, and there are 3 other types of cover – each offers more protection than the minimum legal insurance.

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What you need to know

  • All drivers must have compulsory third party car insurance (CTP). It covers you only for costs linked to injuries and deaths from car accidents.
  • Even if you do not drive your car, and it is kept parked on a road or in a garage, you still need insurance.
  • The next step up from CTP is third party property insurance, which also protects you if you damage the vehicle or property of another person.

So, is car insurance compulsory in Australia?

In Australia, you must insure each registered vehicle with CTP insurance, sometimes known as Green slip insurance.

You buy your policy from one of a handful of insurers your state has selected to take part in its CTP scheme – all of these state-regulated policies cover you for the medical bills of anyone you injure in an accident. Some states will cover some of your medical bills, even when you're at fault.

In most states, your Green Slip automatically comes with your registration but you have to organise it on your own if you're in NSW, ACT or QLD.

How does car insurance work in Australia?

You can choose between three types of additional insurance to go along with your CTP. These are:

Third party property
Third party property damage (TPPD)

This covers any damage you cause to another's property, including cars, homes, land, pets and personal items. But it won't cover repair costs for your car.

third party, fire and theft
Third party, fire and theft (TPFT)

This covers everything TPPD does plus two specific events that cause damage to your car: when it catches fire or when someone steals it. It doesn't cover your car when you cause a crash or when it's damaged by any other type of natural disaster, besides fire.

Third party
Comprehensive

This covers you for everything TPPD and TPFT does, plus, all other ways your car can get damaged: storms, natural disasters, vandalism, uninsured drivers, hit-and-runs and at-fault accidents.

Additionally, there are specialist types of car insurance that you might need depending on your circumstances. Examples include multi-car insurance, which lets you insure all your cars together – and rideshare insurance, to cover you if you're an Uber or Ola driver, for example.

Get car insurance with added peace of mind

1 - 8 of 8
Name Product Roadside Assistance Accidental Damage Storm Choice of Repairer Agreed or Market Value
Budget Direct Comprehensive
Optional
Optional
Agreed or Market
Finder's summary: Awarded the 2021 Finder Award for Car Insurance - Value in QLD, SA, TAS, VIC, WA and Car Insurance - Features in NSW, VIC, WA, this policy offers solid coverage at a low cost. Budget Direct's claims service has received a 4.2/5 based on nearly 5,000 customer reviews.

⭐ Current offer: Get 15% discount on first year's premium when you take out a policy online. T&Cs apply.

Who it might be good for: People who want a comprehensive policy without breaking the bank.
Youi Comprehensive Car Insurance
Optional
Agreed or Market
Finder's summary: Youi Comprehensive Car Insurance is one of the few providers to include roadside assistance in its policy. You'll also get access to YouiRewards which gives you discounts on furniture, parking and more. Youi also has a live chat feature on its site to talk through any questions.

Who it might be good for: People over 25 who want comprehensive cover with a focus on customer service.
Coles Comprehensive
Optional
Agreed or Market
Finder's summary: With Coles comprehensive car insurance, you could earn double flybuys points at Coles supermarkets and you can get $10 off your Coles grocery bill every time you redeem 2,000 Flybuys points. If your car is damaged, you could benefit from a one-week turnaround on repairs.

⭐ Current offer: Get 10% off your first year's premium when you take out a policy online. T&Cs apply.

Who it might be good for: Coles customers and Flybuys collectors.
QBE Comprehensive
Green Company
QBE Comprehensive
Optional
Agreed or Market
Finder's summary: QBE is a sustainable insurance company and also Finder's Green Insurer of the Year 2021 award winner. This policy offers the highest level of protection available from QBE including three-year new car replacement.

⭐ Current offer: Save $75 when you purchase a new comprehensive policy online. T&Cs apply.

Who it might be good for: Those that are looking for a more environmentally friendly insurance choice.
Bendigo Bank Comprehensive
Agreed or Market
Finder's summary: Bendigo Bank’s comprehensive policy offers up to $30 million in liability insurance, cover for your personal items and the option of a replacement car if your vehicle is being repaired after an accident.

Who it might be good for: Those who seek the peace of mind that comes with high legal liability and a range of cover benefits.
ahm Comprehensive
Optional
Both
Finder’s summary: ahm comprehensive car insurance lets you choose higher excess to reduce your premiums. Its Fixed Kilometre Plan can save you up to 30% compared to its standard comprehensive cover.

⭐ Current offer: Get free roadside assistance* for 12 months when you sign up by 30 June. T&Cs apply.

Who it might be good for: People who drive less than 15,000 km per year.
Qantas Comprehensive
Optional
Optional
Agreed or Market
Finder's summary: You'll be able to choose how comprehensive you want your cover to be with optional extras like choice of repairer and the option of agreed or market value.

⭐ Current offer: Earn Qantas Points for joining and paying your premium. Sign up today and earn up to 20,000 Qantas Points (points awarded will be based on your premium). T&Cs and eligibility apply.

Who it might be good for: People who'd like to earn Qantas Points.
Woolworths Comprehensive
Optional
Agreed or Market
Finder's summary: Woolworths has some unique perks like a price-beat guarantee where it'll beat any current comparable comprehensive renewal notice if you're over 25. You can also get 10% off your grocery shop once a month and can add roadside assistance onto your policy for just $7.33 per month.

⭐ Current offer: Save up to 15% when you buy online. T&Cs apply.

Who it might be good for: Woolworths shoppers and those that want to take advantage of its price-beat guarantee.
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Compare up to 4 providers

1 - 9 of 9
Name Product Damage to your Car Damage to Other People's Car Pay Monthly At No Extra Cost Legal Liability
Budget Direct Third Party Property Damage
Only $5,000 cover for uninsured motorist damage
$20,000,000
Save 15% on your first year's premium when you purchase a new policy online. T&Cs apply.
Youi Third Party Property Damage
Only $5,000 cover for uninsured motorist damage
$20,000,000
Covered up to $5,000 for accidental damage to your car caused by an uninsured third party.
Coles Third Party Property Damage
Only $3,000 cover for uninsured motorist damage
$20,000,000
Get 10% off your first year's premium online. T&Cs apply.
QBE Third Party Property Damage
Only $5,000 cover for uninsured motorist damage
$30,000,000
Up to $5,000 for damage caused by an identified, uninsured driver.
Bendigo Bank Third Party Property Damage
$30,000,000
Bendigo Bank’s most basic plan also comes with $30m in liability cover and up to $5,000 in cover for uninsured motorists.
Bingle Third Party Property Damage
$20,000,000
Get accidental damage to someone's car or property cover when you use your car for ridesharing. No cancellation fees.
ahm Third Party Property Damage
Only $3,000 cover for uninsured motorist damage
$20,000,000
Get free roadside assistance* for 12 months when you sign up by 30 June. T&Cs apply.
Qantas Third Party Property Only
Only $5,000 cover for uninsured motorist damage
$20,000,000
Earn Qantas Points when you sign up. T&Cs apply.
Woolworths Third Party Property Damage
Only $3,000 cover for uninsured motorist damage
$20,000,000
Buy online and save up to 15%. Plus, Everyday Rewards Members will save 10% on their monthly shop. T&Cs apply.
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Compare up to 4 providers

Why might I need any additional insurance in Australia?

CTP may be the only form of insurance that's compulsory, but that doesn't mean you should go without more cover.

If you want to stop yourself from potentially severe financial hardship, it may well makes sense to get extra cover. Here are 3 reasons why:

Number 1
Damaging someone's property can be expensive

Causing an accident can be expensive. Even if you forget about the damages to your car, you'll still be responsible for damaging other people's cars plus any other property you can think of, like road signs, bus stops, homes, lawns, shopfronts and animals.

Number 2
There's often no one else responsible when your car is damaged.

If replacing your car would hurt your wallet, consider these situations where CTP won't pay for your car: you cause the accident, an uninsured driver hits you, someone hits you and drives off, someone steals or vandalises your car or there's a natural disaster like a flood or hailstorm.

Number 3
Your bank may require it

If you borrowed money for your car, your lender might insist that you take up additional cover to protect the loan.

How to settle on the right car insurance

Everyone needs some form of additional insurance in case they damage someone's property, but only certain people will need more than that. It really depends on the individual, since not everyone has the same car or the same driving record.

Here are some questions you can ask yourself to determine which level of cover is right for you:

  • Do you owe money on your car? If you're still paying for your car, there's a good chance your lender will require you to have comprehensive car insurance because that's the only level that fully covers your car. Even if not, you should strongly consider comprehensive cover so you don't need to take out a second loan to replace the vehicle.
  • How much is your car worth? If replacing your car wouldn't break the bank, you can get away with third party property cover. It won't cover your car, but will help you avoid massive bills if you crash into someone else's.
  • Do you drive often or rely on your car? If you're on the road a lot, comprehensive car insurance can swoop in to help if an accident leaves your car undriveable. For example, it can provide you with a hire car while yours is in the shop and put you up in a hotel if you're stranded far from home.
  • Where do you live? If you live in an area that's prone to natural disasters, you should get a level of insurance that will cover those specific risks. Third party, fire and theft will help out if you live in a bushfire-prone area. If you live in a flood zone or somewhere that experiences cyclones, you'll need comprehensive cover.

Put simply, comprehensive car insurance is your go-to policy to get peace of mind that you'll be protected against a wide range of risks on the road.

Do I need comprehensive car insurance on an old car?

Everyone should have some level of additional car insurance on top of their CTP, including those who drive old cars. An old car can cause just as much damage to a BMW as any other car on the road, maybe even more so, since older cars tend to be heavier.

That's why it's important to consider getting at least third party property protection – as a minimum.

You should also consider whether or not you'd be in the financial position to replace your car if it was damaged. If replacing your old car would be too much of a burden, getting third party, fire and theft or comprehensive cover will ease some of that worry.

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4 Responses

  1. Default Gravatar
    corrineFebruary 10, 2019

    I am in QLD on WHV 417 and want to buy a car to travel around the country. If I buy a car i understand i must register it as the new owner – do you know how much that is? and then I must insure it with a green slip if I sort this in QLD am I then covered for insurance across all australia?

    • Avatarfinder Customer Care
      JohnFebruary 11, 2019Staff

      Hi Corrine,

      Thank you for reaching out to finder.

      Depending on the vehicle number of cylinders, your vehicle registration in QLD may range from $350-$670. The rules of CTP insurance vary from state to state. For example, drivers in New South Wales, Queensland, South Australia and the Australian Capital Territory have the power to choose their CTP/Green Slip insurance provider. All vehicles in Australia must have CTP insurance before they can be registered and legally driven in any road in Australia. Hope this helps!

      Cheers,
      Reggie

  2. Default Gravatar
    SueNovember 20, 2018

    Can you insure the car you are driving if it is not registered in your name/

    • Default Gravatar
      NikkiNovember 20, 2018

      Hi Sue,

      Thanks for reaching out! You may certainly insure a car you’re driving that’s not registered under your name. Non-owner car insurance allows you to drive someone else’s car and be protected.Typically this insurance only provides liability coverage, not optional coverage like damage to the car, rental reimbursement or medical expenses. Do your research by viewing this list of car insurance providers on our page and ask if they offer this type.
      As a friendly reminder, carefully review the Product Disclosure Statement of the product before applying. You may also contact the insurance provider should you have any questions about their policy.

      Hope this was helpful. Don’t hesitate to message us back if you have more questions.

      Best,
      Nikki

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