Australia Car Insurance

Australia Car Insurance

These simple facts about Australia car insurance will help you make the best decision for your auto insurance needs.

What types of coverage are available and what does the law require? These are just some of the questions that you need answered.

When I first moved to Australia more than 15 years ago, I was surprised to find that the procedure for insuring your vehicle was a bit different than what I was used to in the US.


There are differences in how insurance is determined and even how vehicles are registered. One thing that remains the same is the fact that even in Australia, car insurance is required!

The law requires a minimum of coverage in Australia. In addition to the legal limit, there are other types of car insurance in Australia you can purchase to protect yourself and your vehicle.

Compulsory Third Party Insurance

Compulsory Third Party Insurance, also referred to as CTP, is the bare minimum amount of insurance that is required. If you are from New South Wales (NSW) this is called "Greenslip." If you are in the Australian Capital Territory (ACT) they call it "Third Party Insurance" or TPI.

CTP is insurance that covers personal injury claims by someone other than the owner/driver of the vehicle at fault in an accident.

CTP does not cover any property damage, nor does it cover your own injuries if you are legally liable for the damages.

Compulsory Third Party Insurance is included in your Vehicle Registration Expense. You are unable to register your car unless this insurance is paid.

You will notice that you can save $15-$30 by paying your Registration and CTP annually rather than every 6 months.

You can save an additional $45 or more by paying on time. Those late fees really add up!

Third Party Property Damage Cover

Australia Car Insurance

It can get very expensive if you have an accident and it is determined that you are at fault. You will be legally liable to cover the damages to other people's property. That is where the Australia car insurance called Third Party Property Damage Cover comes in.

As much as I dislike "wasting" money on insurance, this coverage is one that I do recommend. Unless you have a dreadful driving record history, this insurance is relatively inexpensive. I get coverage for a year for less than $100. It is only about $8 per month when all is said and done.

I consider myself a good driver, but there are always unexpected events - that's why they call them "accidents." I would never be able to afford the cost of replacing someone's expensive new car if I "accidentally" caused a collision. I consider this form of Australia car insurance a wise use of $8 each month.

Fire, Theft, and Third Party Property/Extra Cover

You can also choose to purchase Fire, Theft, and Third Party Property Damage. In Queensland this is called Extra Cover. This will provide you with the Third Party Property Damage Cover mentioned above as well as protection for your own car in the event of fire and theft. Pretty obvious by the name, isn't it? :-)

If you have a newer automobile, this may be worth considering for you. It is usually the nicer cars that are stolen. :)

Comprehensive Cover

Australia Car Insurance

Speaking of newer vehicles... ...if your auto is fairly new or in really good condition, you may need to start thinking about covering your own damages in case of an accident. Comprehensive Cover includes Third Party Property Damage and Extra Cover, of course. But, it also pays to have your auto repaired or replaced if you smash it up - or someone else smashes it for you!

This is going to be your most expensive Australia car insurance option. If you own a new car, this is an almost necessary expense. If your car is financed through a loan or lease, you are almost certain to be required to carry Comprehensive Cover. Keep this in mind.

Reducing Australia Car Insurance Costs

There are a few things you should know about reducing the amount of your premiums when purchasing Australian car insurance.

  1. First of all, you can ask for a higher excess. The Excess is the amount you will be paying first before the insurance pays for your claim if you are found to be at fault. The higher your excess, the lower your premium rates.

  2. Secondly, pay your Australia car insurance premiums annually, rather than semi-annually or monthly. Most companies charge an additional fee for you to make payments.

  3. Third, try to get all of your different types of insurance with the same company. If you have home and contents insurance, life insurance, caravan insurance, or boat insurance, etc, you will be able to get a multiple policy discount.

  4. Finally, take advantage of your No Claim Discount. If you have a good driving record, every year you can reduce your insurance costs by getting a better rating on your NCD. Eventually, you can work your way into a Rating 1 for life. This will provide you with the highest level of discount and save you the most money.

Be sure to shop around for Australia Car Insurance.

Your CTP will be pretty much the same with almost all companies, but you can find substantial savings by comparison shopping for your optional coverage. It takes a small amount of time, but it is worth the effort in dollars saved.

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