What types of car insurance are available in Victoria?
There are three main types of optional car insurance available in Victoria and Australia:
Third party property damage insurance
Third party property damage insurance is the most basic level of optional car insurance cover. It provides financial cover for damage you cause to someone else’s vehicle or property while driving your car. It may also cover your liability if legal action is taken in relation to the damage you caused.
Third party fire and theft insurance
Third party fire and theft insurance includes third party property damage cover and also provides cover for your own vehicle if it's stolen or damaged by fire.
Comprehensive car insurance
Comprehensive car insurance is the highest level of car insurance cover available in Australia. It can cover damage to your own car as well as damage caused to other people’s vehicles or property.
Comprehensive policies may also cover events such as theft, fire, storms, hail and vandalism, although inclusions and exclusions vary between insurers. Depending on the provider, you may also be able to choose between insuring your car for market value or agreed value.
What is Compulsory Third Party (CTP) insurance?
CTP insurance covers compensation claims if you injure or kill someone in a road accident. In Victoria, this scheme is managed by the TAC and included in your registration costs. It does not cover damage to your own vehicle or damage to other people’s vehicles or property.
What does comprehensive car insurance in Victoria cover?
Comprehensive car insurance is the broadest level of optional cover. It can help pay to repair or replace your car after an insured event, such as an accident, theft, fire or weather-related damage. It also typically includes cover for damage you cause to other people’s property.
Policies vary between insurers, so always check the Product Disclosure Statement (PDS) for inclusions, exclusions, conditions and limits.
What comprehensive car insurance commonly includes:
- Accidental damage to your car, regardless of fault
- Third party property damage
- Theft, attempted theft, fire and vandalism
- Weather-related damage such as storms and hail
- Towing and roadside clean-up after an insured event.
Features that commonly vary between providers include:
- Hire car after theft or when you are not at fault
- Windscreen and glass cover
- Choice of repairer
- Genuine parts versus equivalent parts policies
- Cover for accessories and personal items
- Market value versus agreed value settlements.
Additional considerations when choosing car insurance in Victoria
Victoria’s mix of busy metro roads, regional driving and variable weather conditions can influence the type of cover you may want. Drivers in Melbourne and larger metro areas may prioritise theft protection and not-at-fault hire car benefits, while regional drivers may place more value on roadside assistance and animal strike cover.
Storm and hail events can also affect claims, so check how weather-related damage is defined in the policy and whether any exclusions or waiting periods apply.
What is the best car insurance in Victoria?
The best car insurance for you will depend on factors such as the type of car you drive, where you live, how often you drive and the level of cover you want.Â
When comparing car insurance, ask yourself questions such as:
- Do you want to keep costs down or are you willing to pay more for a higher level of cover?
- How often do you think you will make a claim? Choosing a higher car insurance excess could make your premiums cheaper, but you’ll need to pay more out of pocket if you make a claim.
- Are there any specific risks you want to be covered for? For example, is your area prone to flooding? Do you want access to a hire car after an accident?
- Are there any features you are looking for? For example, some policies allow you to pay monthly at no extra cost, while others charge higher premiums for this. Some policies also come with roadside assistance.
Canstar's 2026 Outstanding Value Car Insurance Awards winners
Canstar's car insurance research analyses premiums and features across a wide range of policies. Because the "best" policy looks different for every driver—whether that's the lowest premium, the most comprehensive cover, or a provider with a strong claims reputation—our Star Ratings and awards are designed to help cut through the noise.Â
They can help Victorian drivers compare providers offering strong overall value across price, policy features and claims experience, and serve as a useful guide for finding a policy that fits your individual priorities.
Canstar's 2026 Car Insurance Award Winners include:
- Outstanding Value – VIC: AAMI
- National Award Winners: AAMI, Bingle, and ROLLiN' Insurance
- Most Satisfied Customers Award – Car Insurance (Victoria): Commonwealth Bank
- Most Satisfied Customers Award – Car Insurance (National): Bupa
Use Canstar's car insurance comparison tables to compare award-winning and highly rated comprehensive policies side by side. Awards and Star Ratings can be a useful starting point when narrowing down providers, but it's still important to compare policy features, exclusions, excesses and optional extras based on your own driving needs and budget.
What the best car insurance in Victoria can look like
- Weather protection: Storm, hail and flash flooding can affect Victorian drivers, particularly during severe weather events. Check how weather-related damage is covered and whether exclusions apply.
- Affordable excess: Choosing a higher excess can help lower your premium, but it’s important to make sure the amount would still be manageable if you needed to claim.
- Market value vs agreed value: Market value policies are often cheaper, while agreed value policies can provide greater certainty for newer or higher-value vehicles.
- Claims experience: Features such as 24/7 claims support, repair guarantees, choice of repairer and transparent claims processes can influence the value of a policy.
- Useful optional extras: Windscreen cover, roadside assistance, hire car benefits and cover for child seats or accessories may be worthwhile depending on how you use your vehicle.
- Transparent exclusions: Unsealed road use, rideshare driving and unlisted drivers are common considerations, so always check the PDS for exclusions and conditions that may apply to your policy.
How to find cheap car insurance in Victoria
If price is your priority, there may be ways to reduce the cost of your car insurance while still maintaining a suitable level of cover.
Increase your excess
Choosing a higher excess will generally reduce your premiums, although you’ll need to contribute more if you make a claim.
Compare policies regularly
Premiums, discounts and policy features can change from year to year, so comparing quotes at renewal time may help you find better value.
Consider market value cover
Market value policies are often cheaper than agreed value policies because payouts are based on the car’s value at the time of the claim.
Remove extras you won’t use
Optional extras can increase premiums. Consider whether features such as roadside assistance or hire car cover are worth the additional cost for your situation.
Pay annually if possible
Some insurers charge instalment or processing fees for monthly payments, so paying annually may reduce the overall cost.
Keep your details accurate
Estimated annual kilometres, where the car is parked and listed drivers can all affect your premiums. Providing accurate information may help avoid paying more than necessary.
Look for discounts
Some insurers offer discounts for buying online, bundling policies, maintaining a good driving history or insuring multiple vehicles.
How much does car insurance cost in Victoria?
Canstar's research found the average annual comprehensive car insurance premium in 2026 in Victoria is $3,293. This is an increase of $192 compared to 2025's average cost.
However, you can potentially save hundreds by switching from an average-priced policy to a product rated 5-Stars by Canstar. Our research found 5-Star policies in Victoria were $835 cheaper annually than the state's market average.
The cost of car insurance in Victoria will vary depending on a range of factors, including:
- Your age and driving experience
- Your driving history and claims record
- Where you live
- The type, make and age of your car
- How often and how far you drive
- Where your car is parked
- The level of cover you choose
- Any optional extras included in the policy
- Your nominated excess.
Drivers in Melbourne and some metro areas may pay higher premiums due to higher traffic volumes, theft rates and accident risks, while regional drivers may face different risk factors depending on where they live and drive.
Premiums can also vary significantly between insurers, which is why comparing policies and quotes can be worthwhile.
How living in Victoria can affect your cover
Where and how you drive in Victoria can influence both your premiums and policy features.
Busy metro areas may have higher risks of theft, collisions and vandalism, while regional drivers may face increased exposure to long-distance driving, animal strikes and severe weather conditions.
Some insurers may also apply conditions or exclusions for unsealed roads or off-road driving, so it’s important to check the policy wording if you regularly travel outside urban areas.
Optional extras to consider
Depending on the insurer and policy, optional extras available with comprehensive car insurance may include:
- Windscreen and glass cover
- Hire car after theft or a not-at-fault accident
- Roadside assistance
- Choice of repairer
- New-for-old replacement for newer cars
- Cover for accessories and personal belongings
- No-claim bonus protection.
Before adding optional extras, consider whether the added cost is worthwhile based on how you use your car and the risks most relevant to you.
Market value vs agreed value
Market value cover means your insurer will generally pay the market value of your car at the time of a total loss claim.
Agreed value cover means you and the insurer agree on a set insured amount when you take out the policy.
Market value policies are often cheaper, while agreed value can provide greater certainty for newer, rare or modified vehicles. Ultimately, it comes down to what you feel most comfortable with.
How to switch car insurance in Victoria
Switching car insurance policies is usually straightforward, but it’s important to avoid gaps in cover.
Step 1: Gather your information
Have your licence details, current policy information, registration details, estimated annual kilometres and information about any listed drivers ready.
Step 2: Compare like-for-like policies
Compare policies using similar excess amounts, value types and optional extras so you can make a fair comparison between insurers.
Step 3: Check cancellation terms
Review whether cancellation fees apply and whether you may be eligible for a partial refund on your existing policy.
Step 4: Start your new policy before cancelling the old one
Make sure your new policy is active before cancelling your existing cover to avoid any uninsured period.
Step 5: Keep your documents updated
Store your updated policy documents safely and make sure any regular drivers understand the inclusions, exclusions and excesses that apply.
Always read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) before purchasing a policy to confirm whether it is suitable for your needs.
