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Car Insurance

What is car insurance?

CANSTAR - Outstanding Value - Car Insurance

Car insurance is designed to protect your finances if something an insured event happens connected to you owning or driving a car. Depending on the type of car insurance you have, car insurance can cover:

  • Compulsory Third Part (CTP): Covers damage to other people. It is compulsory to have CTP insurancein order to register your vehicle.
  • Third Party Property (TPP): Covers damage to other people’s property or car, and damage to other people.
  • Third Party, Fire and Theft: Covers damage caused to your own car caused by fire or theft, damage to other people’s property or car, and damage to other people.
  • Comprehensive: Covers damage caused to your own car by crash accidents and a wide range of insured events (e.g. natural disasters, fire, and theft), damage to other people’s property or car, and damage to other people.

We’re used to spending a lot of time picking out which car we want to buy, but we should also spend as much time finding the right car insurance for that vehicle.

Choosing the car insurance that’s right for you will depend in part on your budget. Ideally, though, you should look for the best cover you can comfortably afford.

Start your search by comparing car insurance policies on our website or downloading our free Car Insurance Star Rating Report.

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How Canstar compares car insurance

Canstar compares car insurance with our unique, sophisticated car insurance star ratings methodology, comparing both pricing and features to determine the overall value of an insurance product. The results are reflected in our consumer-friendly 5-star concept, with a 5-star rating signifying that an insurance policy offers outstanding value.

Some of the features Canstar compares for car insurance are:

  • After accident care – towing, taxi fares, and emergency accommodation cover
  • Repairs conditions – excess charged, choice of repairer, and cover for replacement parts
  • Windscreen cover
  • Rental car available during repairs (complimentary)
  • Roadside assistance available (complimentary)
  • Exclusions
  • Customer satisfaction ratings

Check what else you need to consider when choosing car insurance here.

You can read the full car insurance star ratings report or compare car insurance yourself, based on your own requirements, using the comparison selector tool at the top of the page.

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Written by: TJ Ryan and Tim Smith

 

Car insurance glossary of terms

Please note that these are a general explanation of the meaning of terms used in relation to car insurance. Your insurance provider may use different wording and you should read the terms and conditions of your insurance policy carefully to understand what you are and are not covered for. Refer to the product disclosure statement (PDS) from your provider.

Account-keeping fee / Ongoing fee: A monthly account-keeping fee that is charged by the lender to cover the administration cost of maintaining your policy. Alternatively, you may be charged an annual fee rather than an ongoing account-keeping fee.

Anti-lock braking system (ABS):  A safety system that stops the wheels from locking up when you brake, which decreases the risk of skidding. Also known as an anti-skid brake system.

Agreed value: The sum for which your car is insured, which has been fixed by agreement between the insurer and the car owner. The option for your sum insured is to insure your car for the market value (see ‘Market value’ below).

Comprehensive: The highest level of insurance policy, which covers your car for damage to other people, damage to the property of others, damage to your own car if it is damaged or lost because of fire or theft, and accidental damage to your own car, regardless of who caused the damage. Comprehensive car insurance also has a range of optional extras, including complimentary replacement vehicles while you can’t drive your own car, and no-excess windscreen replacement if you have a crash.

Compulsory Third Party (CTP): A compulsory insurance policy that covers you if you injure or kill someone in a motor vehicle accident. The specific conditions on this type of insurance are different from state to state, but it is compulsory to hold CTP in order to register your vehicle.

Excess: The excess is an amount that you pay towards the cost of your claim. Different excesses might apply to different types of claim, so you should check your policy for details. You may be able to pay a lower premium if you have a higher excess, but you need to be sure that you could afford to pay the excess unexpectedly in an emergency.

Exclusions: Anything that is not covered by your policy. Exclusions may vary between insurance providers, but find out the common exclusions here.

Forced entry: Illegal entry into your car which includes illegally using keys or picking locks. It does not include entering your car through an unlocked door, window, or skylight.

Inclusions: Anything that is covered by your policy. When a particular event is listed as being included in your policy, the insurer will cover the whole expense or a listed percentage of the cost involved.

Market value: What your car would be worth on the market, or it would cost to replace your vehicle with one of the same make, model, age, and condition as your vehicle was in before the loss or damage. This is one option for your sum insured; the other option is to insure your car for an agreed amount (see ‘Agreed value’ above).

No claim bonus: A discount on your premium for drivers who have not made any claims so far on their insurance. Some insurance providers have a ‘protected no claim bonus option’, where they will let you keep your no claim bonus after you make your first claim in any one period of insurance, under certain conditions.

Nominated driver: When you sign up for insurance, you must advise the insurer who will be listed on your policy as being allowed to drive your car (usually yourself and someone else). These people are the nominated drivers. Other people who drive your car but are not nominated drivers would be required to pay an additional excess if they were in an accident while driving your car.

Premium: The premium is the amount you pay for the cover your insurance policy provides, and may be paid once annually or more frequently (e.g. monthly, fortnightly). Your premium must be paid on time for your car to remain covered.

Third Party Property: This is an insurance policy that covers the cost to repair damage caused by your car to other people’s property. It will also cover your legal costs if they sue you over that damage.

Third Party, Fire and Theft: This is an insurance policy that covers damage to the property of others, and some limited cover for your own car if it is damaged or lost because of fire or theft.

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Who offers car insurance in Australia?

At the time of writing, CANSTAR researches and rates the following car insurance providers:

1300 Insurance

1Cover Direct Insurance

1st for Women

AAMI

AI Insurance

Allianz

ANZ

Aon

Apia

Australia Post

Australian Seniors Insurance Agency

Australian Unity

Bendigo Bank

Bingle

BOQ (Bank of Queensland)

Budget Direct

Bupa

Buzz Insurance

Cashback Car Insurance

CGU

Coles Insurance

CommInsure

Dodo Insurance

E Group

GE Money

GIO

Guild Insurance

HBF

Heartland Seniors Finance

HSBC

Hume Bank

ibuyeco

Just Car Insurance

Kmart Tyre & Auto Service

Latitude Financial Services

Myer Insurance

NAB

National Seniors Australia

NRMA

OnePath

Over Fifty Insurance

Ozicare Insurance

People’s Choice Credit Union

Progressive

QBE

RAA

RAC

RACQ

RACT

RACV

Real Insurance

SGIC

SGiO

Shannons Insurance

St.George Bank

Suncorp Bank

Virgin Money

Westpac

Woolworths Money

Youi

Compare car insurance providers using the comparison selector tool at the top of this page.

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