What does third party fire and theft car insurance cover?
Third party fire and theft is a type of insurance policy that covers the cost of damage your car does to other people’s vehicles and property, and covers the cost of damage to your own car if it occurs as the result of a fire or theft. It’s important to understand that third party fire and theft insurance doesn’t cover your car if it’s damaged in an accident–for this, you need comprehensive car insurance.
What extras does third party fire and theft cover?
Depending on the insurer, third party fire and theft can also cover:
- A hire car after a theft
- Towing costs for your vehicle after a fire or theft
- Replacement locks and keys after a theft
- Personal property (excluding mobile phones, computers, business tools and cash)
- Transport and emergency accommodation costs
- Partial repair costs if your car is damaged by an uninsured driver, if you can prove they were at fault (the driver might also have to be identified)
Is third party fire and theft the best type of car insurance?
The ‘best’ type of car insurance is a policy that covers you for what you need at a price you can afford. Think of it this way–if your car is valuable and would be expensive to repair or replace if it’s damaged in an accident, then a comprehensive insurance policy may provide you with peace of mind.
On the other hand, if you mainly want to be covered for damage you might cause to other people's cars and property, and just want a limited amount of cover for your own car, then third party fire and theft insurance might be suitable. Note that some third party fire and theft policies only cover damage to your car up to a set amount–for example, up to $10,000.
Does third party fire and theft cover learner drivers?
If someone in the family is learning to drive, then you’ll be pleased to know that most third party fire and theft policies cover learners. There are some important caveats to keep in mind, specifically:
- It’s likely that a licensed driver will need to accompany the learner in the car.
- The learner may need to be listed by name on the policy.
Different insurers treat learner drivers differently, so you’ll need to read the fine print of the policy to know exactly what you’re covered for. For example, some insurers will cover learner drivers without the need for them to be listed, as long as they are accompanied by licensed drivers.
Learner drivers may not enjoy all the benefits of your insurance policy either. For example, if your third party fire and theft insurance covers a hire car for you to use after a theft claim, learners may not be covered to drive it.
Likewise, if your car is a high-performance vehicle, then it will be difficult to get insurance for learner drivers, as most insurers consider drivers under 25 to be too high-risk for these kinds of vehicles.
If a learner driver is responsible for an accident, you may be required to pay a young or inexperienced driver excess. This is an additional amount that you have to pay on top of your standard excess.
What factors affect the cost of third party fire and theft insurance?
When calculating the cost of your third party fire and theft insurance premiums, an insurer will consider factors like:
- Your age: Drivers under 25 tend to pay more for insurance premiums as they may be considered riskier, whereas experienced drivers with clean driving histories may pay less.
- Your address: If you live in an area that is prone to natural disasters, especially bushfires or floods, or has a high crime rate, your premiums may be higher as the risk may be considered greater.
- Your car: The make, model, age, condition and value of your car can also affect the cost of your insurance premiums.
Does third party fire and theft cover vehicle modifications?
Yes, most third party fire and theft insurance covers vehicles that have been modified for performance, aesthetic or accessibility reasons, but there are some important qualifiers to keep in mind. In order to be covered, modifications must be:
- legal in your state or territory, and
- declared to your insurer.
Some additions to your car are automatically covered by certain third party fire and theft policies. Depending on the insurer, this can include modifications like alloy wheels, spoilers, personalised plates, towbars and window tinting.
That said, third party fire and theft insurance only pays out for damage to your vehicle up to a set amount. Many insurers will only pay out up to a maximum of $10,000 for damage to your car caused by fire and theft.
If your car is your baby and you’ve poured a lot of money into modifications, then a third party fire and theft policy may not provide you with sufficient peace of mind.
You might instead consider a comprehensive car insurance policy, to ensure you’re covered more extensively for damage to your vehicle, including damage caused by accidents.
If your car has been modified with accessibility features such as a passenger or wheelchair hoist or modified controls, third party fire and theft insurance may not be sufficient for your needs.
There are specialist insurers in Australia who provide insurance for wheelchair-accessible vehicles (WAVs) and other disability converted cars, so for your peace of mind, one of these insurers may provide cover more suitable to your specific needs.
How to find the cheapest third party fire and theft car insurance policy
If you’re looking for the cheapest deal on a third party fire and theft car insurance policy, here are some tips:
- Shop around a range of providers to compare premiums, ensuring you are looking at what’s covered by the policies, as well as their price.
- Opt out of any optional cover that you don’t need
- Consider increasing your excess, but remember you will have higher costs if you need to make a claim
- Park your car in a secure location overnight, and let your insurer know so it can be factored into your premium calculations
- Keep your mileage down (the more you drive, the higher your premiums may be)
- Drive safely, as your premium could be cheaper if you have a clean claims history and driving record
- Minimise the number of drivers under 25 nominated as additional or listed drivers on your policy
- Consider if it’s cheaper to buy an annual policy and pay upfront, rather than pay monthly premiums
- Review whether you use market or agreed value to insure your car
- Keep an eye out for insurers offering discounts to customers who purchase their policy online instead of over the phone.
Can you choose your repairer?
One of the drawbacks of third party fire and theft policies is that insurers will usually not give you a choice of who repairs your car if it’s damaged as a result of a fire or theft.
There are some exceptions to this–for example, RAA Insurance in South Australia will let you choose your repairer for third party fire and theft, as long as the person doing the job meets their standards.
In most cases, though, insurers will require you to use someone from their preferred network of repairers.
If you want a broader choice of repairers for your vehicle, you’ll need to consider a comprehensive car insurance policy.
