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Do I need car insurance in Australia?

CTP is the only form of car insurance that's compulsory in Australia. But does that mean you should skip all other cover?

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Everyone needs to have compulsory third party car insurance (CTP), but do you need more than that? Well, not legally. But it's definitely a good idea to have at least third party property damage cover. This would save you from forking out your own cash if you crash into a pricey Mercedes.

If you can afford it, comprehensive car insurance is always the better option, especially if you can't afford to pay for a new car straight up or you've spent a bit of cash on your car already.

Is car insurance compulsory in Australia?

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

You buy your policy from one of a handful of insurers your state has selected to take part in its CTP scheme and 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.

In a nutshell, CTP keeps you from owing money for other people's medical bills.

Do I need any additional insurance in Australia?

CTP is the only form of insurance that's compulsory, but does that mean you should skip out on the rest?

If you're without insurance and cause a three-car pile-up, you'll have to cover thousands of dollars for repairs from your own pocket. Find that someone has damaged your car and you're not at fault? You'll still have a really hard time getting your money back.

Even though other forms of insurance aren't compulsory, if you want to stop yourself from being in some crazy money troubles, it just makes sense to get extra cover. Here's why:

  • 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.
  • 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.
  • 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.

Protect future you and get car insurance

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 2019 Finder Award for the Best Value Car Insurance, 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.

Who it might be good for: People who want a comprehensive policy without breaking the bank.
Bingle Comprehensive
Market
Finder's summary: Bingle consistently come up as one of the cheaper insurers out there. They only cover the basics, so you don't get to choose your own repairer, you're not covered for personal items in the car and you won't get a hire car if your car is stolen. But this keeps their premiums low.

Who it might be good for: Someone who wants a low cost option that covers them for the basics.
Youi Comprehensive
Optional
Agreed or Market
Finder's summary: Youi Comprehensive Car Insurance is one of the few providers to include roadside assistance in their policy. You'll also get access to YouiRewards which gives you discounts on furniture, parking and more. Youi also have a live chat feature on their 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.
Woolworths Comprehensive
Optional
Agreed or Market
Finder's summary: Woolworths catch our eye due to some unique perks like a price beat guarantee, where they'll beat any current comparable Comprehensive renewal notice if you're over 25. You'll also get 10% off your grocery shop once a month, and can add roadside assistance onto your policy for just $7.35 per month.

Who it might be good for: Woolworths shoppers and those that want to take advantage of their Price Beat.
Virgin Comprehensive
Optional
Optional
Agreed or Market
Finder's summary: Finalists for the 2019 Finder Awards for Best Value Car Insurance, Virgin Comprehensive provides a good level of cover for a decent price. You'll get 15% off on your first year’s premium when you buy online and get access to their hail hero service. Plus, get a $100 e-Gift card when you purchase a new policy by 30 November 2020 (T&Cs apply).

Who it might be good for: People who want a comprehensive policy that's affordable.
Qantas Comprehensive
Optional
Optional
Agreed or Market
Finder's summary: You'll be able to pick and choose how comprehensive you want your cover to be thanks to optional extras like roadside assistance, choice of your own repairer, and the option of agreed or market value. Plus, you'll earn Qantas Points when you join and get access to the Qantas Wellness App.

Who it might be good for: People who love collecting frequent flyer points.
Poncho Comprehensive
Agreed
Finder's summary: Poncho works like a monthly subscription - you pay monthly and can cancel and leave at anytime. You can also list multiple cars and drivers under one policy, making it ideal for families and groups living together under one household.

Who it might be good for: People who want their car insurance month-to-month.
Coles Comprehensive
Optional
Agreed or Market
Finder's summary: Coles have two-tiers of comprehensive car insurance to choose from. You'll 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 you're over 30, you can get roadside assistance free for a year.

Who it might be good for: Coles customers and Flybuys collectors.
Stella Comprehensive
Optional
Agreed or Market
Finder's summary: Stella’s a female-focused insurer. They'll cover you if your car is damaged as a result of domestic violence. They offer higher cover for baby gear than most, with up to $2,000 cover for prams, strollers and child seats. You get a free Bauer magazine subscription when you sign up and a portion of your premiums go to supporting female-led businesses.

Who it might be good for: Someone who wants a female-centred car insurance policy (they'll cover men too!).
Kogan Comprehensive
Optional
Agreed or Market
Finder's summary: Kogan comes with all the perks that most comprehensive car insurance policies include but you'll also be entitled to some benefits on their online store. This usually comes in the form of a gift voucher or discount if you buy online. Plus, Kogan offer a pay as you drive option, which could be good if you're not on the road that much.

Who it might be good for: Kogan shoppers and those that don't drive much.
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Compare up to 4 providers

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
$20,000,000
Save 15% on your first year's premium when you purchase a new policy online. T&Cs apply.
Bingle Third Party Property Damage
$20,000,000
Youi Third Party Property Damage
$20,000,000
Emergency roadside assistance included in Comprehensive policies.
Woolworths Third Party Property Damage
$20,000,000
Buy online and save up to 15%. T&Cs apply.
Virgin Third Party Property Damage
$20,000,000
Grab a $100 e-Gift card when you purchase a new eligible Virgin Car Insurance policy by 30 November 2020. Purchase online and you'll also save 15% on your first year’s premium. T&Cs Apply.
Qantas Third Party Property Only
$20,000,000
Earn Qantas Points when you sign up. T&Cs apply.
Coles Third Party Property Damage
$20,000,000
Save 10% when you buy online. T&Cs apply.
Kogan Third Party Property Damage
$20,000,000
Save up to 10% when you buy online.
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Compare up to 4 providers

What are my car insurance choices?

Generally speaking, you can choose between three types of additional insurance to go along with your CTP. These are:

  • Third party property damage (TPPD). This covers any damage you cause to anyone's property but your own, including cars, homes, land, pets and personal items.
  • 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.
  • 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 even crashes you cause.

What car insurance do I need for my car?

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.

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 you should definitely consider getting at least third party property protection.

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 take away some of that burden.

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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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