Car insurance for learner drivers - are you covered?

Finance Writer · 25 June 2021
If you are considering car insurance as a learner driver, or have a learner driver you’d like to add to an existing car insurance policy, you might be wondering what options are available. Canstar reports…

Does your existing car insurance cover you or is it better to take out a new policy?

Young learner drivers in Australia sit in a high-risk age group, which means they’ll typically pay more for car insurance than people in some other age groups, due to their lack of experience on the road. The insurer is taking on a certain amount of risk in insuring learner drivers against accidents.

If you are a learner driver, or want to get a learner driver added to your policy, you may be interested in car insurance options available to you.

In this guide, we cover:

Do I need special car insurance for a learner driver?

You don’t need special insurance for a learner driver. As Budget Direct’s Chief Growth Officer, Jonathan Kerr told Canstar, there are generally two options for insuring an L-plater:

  1. Add them onto your existing policy. If your child, like most Australian families, is learning to drive in the family car, you can add them to your policy. (Note: some policies may automatically cover learners, but you’ll need to check your Product Disclosure Statement [PDS] to be sure).
  2. Take out a separate policy. If the learner has their own car to learn in and they’ll be driving it more than anyone else, you’ll have to buy a new car insurance policy, listing them as a regular driver.

Mr Kerr added, “whether you add your child to an existing car insurance policy or buy a new one will depend on the car they learn in.”

Can a learner driver own and insure a car?

Yes. If a parent or the learner buys a car to learn in and they’ll be the primary driver, then they’ll need to take out their own insurance policy. Always read the PDS, though, so you know exactly what’s covered and how much you’re looking at for premiums, as well as excesses.

Car insurance types and excess

When searching and comparing options for car insurance, you’ll usually come across different types of car insurance, including compulsory third party (CTP), third party property insurance, third party fire and theft cover and comprehensive car insurance.

1. Compulsory third party (CTP) or Green Slip insurance

The compulsory third party (CTP) or Green Slip insurance that’s legally required to register a car in Australia provides compensation for people killed or injured when your vehicle is involved in an accident. It does not provide any cover for the vehicle itself, or any other property.

2. Third party property car insurance (often offered with third party fire and theft cover)

Third party property car insurance covers the cost of repairs for damages to another party’s property (e.g. their car or home) if you’re at-fault, but does not include cover for your vehicle. Some third party car insurance policies include cover for fire and theft.

3. Comprehensive Car Insurance

Comprehensive insurance provides the most protection, covering damage to your car, damage to other people’s property, and damage or loss resulting from your car being stolen.

Excesses may vary

Additionally, you’ll need to consider the various types of excess that may apply to your policy, or the learner driver, should they have their own policy. For example, on top of paying a standard excess towards your claim, learners could also be charged an ‘age excess’.

Depending on the car insurance policy, excess can come in several forms:

  • Standard / basic excess – This is the basic excess that applies to the policy, regardless of who is driving.
  • Younger driver excess – This is an additional excess applied to any driver under the age of 25.
  • Learner driver excess – L-platers can sometimes have their own excess applied.
  • Inexperienced driver excess – This type of excess typically applies to learner drivers over 25 years old and can be more expensive than a typical excess.
  • Undeclared driver excess – Some policies can require you to list a learner driver in order to be covered. This excess could be charged if an undeclared driver is involved in an accident.
  • Car excess – An additional excess may come into play based on the type or age of the vehicle being driven.

It pays to do your research to make sure you’re getting the best coverage and value for money. Keep an eye out for additional benefits, like after-accident care, repair conditions, windscreen cover, and whether complimentary rental vehicle cover and roadside assistance are provided.

What is the cheapest way to insure a learner driver?

Mr Kerr said it can usually be more cost-effective to have a learner driver insured on a parents’ or guardians’ car insurance policy. For learner drivers with their own car, he recommended a comprehensive car insurance policy ‘provides the most protection’, while third party car insurance may be suitable if a car only has a low market value and reducing the overall cost of car insurance is important to you.

Of course, keep in mind that if you don’t take out comprehensive car insurance, you might be caught out in the event of an accident with higher out-of-pocket expenses for car repairs or if the car is written-off. Paying a lower premium can have advantages initially, but higher excesses and policy limitations can lead to higher costs if a learner driver is involved in a serious car accident.

If you’re the parent or guardian of an L-plater, it’s worth checking with your insurer about the cost difference between including your teenager or young adult as an additional driver on your existing insurance, and weighing this up against the price and value offered by a separate policy.

You can explore how much you can expect to pay on average for comprehensive car insurance by age, gender and state and see how the two separate policies compare. You may also be interested in finding out about the considerable savings that might be possible by choosing an award-winning car insurer in your state or territory.

How can a learner driver reduce insurance costs?

Mr Kerr explained that the type of vehicle has an effect on the cost of insurance (sports and luxury cars typically cost more). If you are looking at purchasing a new car as a learner driver (or on behalf of one), it may be a good idea to consider buying the safest car you can afford. Canstar has related articles about ANCAP safety ratings and the safest new and used cars in Australia that might be of interest.

Other things to consider that could impact the cost of premiums include:

  • security, like alarms, immobilisers, and other anti-theft devices
  • where the car is usually parked (on street, off street, undercover or in a lock-up garage)
  • increasing the excess to lower your premium (making sure you can afford the higher excess amount in the event of a claim)
  • any available discounts you may be eligible for – some providers offer premium discounts when you buy a new policy online, as well as multi-policy discounts
  • paying premiums differently, such as annually or upfront, if a cheaper rate may be available

Long term, the best way to keep car insurance costs down is to regularly take care of the car and maintain an excellent driving record. Some car insurers may also offer a loyalty discount.

You can compare car insurance policies with Canstar, as well as find out more about generous savings that might be available by switching to an award-winning car insurance provider.

Main image source: michaeljung/

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