Third party property damage car insurance

Australia has several different types of car insurance, which is why it’s important to work out the best type to suit your needs and budget. The most basic level of optional car insurance, third party property damage, may prove useful to the right Australian car owners under the right circumstances.

What is third party property damage car insurance?

Third party property damage car insurance is the most basic level of optional car and third party car insurance available to drivers in Australia. It provides financial cover towards expenses that you may incur if you cause accidental damage to someone else’s property with your car. It also may cover your own legal costs in the event of legal proceedings.

Although it’s optional, third party property insurance can bring drivers greater peace of mind, as a car accident can sometimes lead to the driver at fault being sued for damages to repair or replace another driver’s property.

Compare Car Insurance

What does third party property damage cover?

This kind of insurance protects you financially in the event of an accident where you have caused damage to someone else’s property and are at fault. If you make an eligible claim to your insurer, this level of cover should help to pay the repair or replacement costs incurred by the other party.

It’s important to keep in mind, though, that your policy may contain a pre-agreed limit as to how much the insurance provider will pay out. For this reason, it’s a good idea to check any limits or exclusions your policy may include, and to read the product disclosure statement (PDS) and other relevant documentation provided by your insurer.

It’s also important to note that third party property damage insurance does not cover the costs of repairing or replacing your own vehicle in the event of an accident or if your car is stolen or damaged by fire. For this type of cover, you may choose to look into a more extensive type of car insurance, such as the other type of third party car insurance, third party fire and theft, or a comprehensive car insurance policy.

→ Read more: What is comprehensive car insurance?

What’s excluded from third party property damage insurance?

Third party property damage insurance doesn’t include any cover for damage to your own vehicle. If you want cover for theft, malicious or accidental damage, fire, storm or hail damage, then you’ll need to purchase a higher level of cover in the form of third party, fire and theft, or comprehensive car insurance.

Additionally, bear in mind that extras such as roadside assistance, windscreen replacement, rental car use and personal effects cover are usually only available when you purchase a comprehensive car insurance policy.

Likewise, it’s unlikely that your insurance provider will approve your claim if you are found to be driving recklessly or illegally, carrying too many people in your vehicle, driving under the influence of drugs, or have a higher blood-alcohol concentration than the legal limit specified by your licence conditions.

Is my own car covered under third party property damage insurance?

Third party property damage insurance does not cover your own vehicle in the event of an accident, even if you are not at fault. In fact, all three forms of third party insurance (Compulsory third party, third party property damage and third party fire and theft) will typically not cover you or your vehicle, except for in certain circumstances. To protect yourself,, other nominated drivers and your vehicle, you will generally need to purchase additional insurance such as a comprehensive car insurance policy.

Is third party property damage car insurance the same as CTP?

Compulsory third party (CTP) insurance, also known as Green Slip insurance in New South Wales, is a form of mandatory insurance required for all registered vehicles in Australia. It provides personal injury liability cover to protect you financially if anyone is hurt or fatally injured in an accident you cause.

This differs from third party property insurance, which is an optional type of insurance that provides financial and legal liability cover for damage you may cause to someone else’s property. Put simply, CTP protects other people, and third party property protects other people’s property. You may also be able to access some cover for your own medical treatment via CTP, depending on where you live, the circumstances of your accident, and the insurer.

Each state and territory government requires all vehicles to be registered and have CTP insurance in place before being driven on the roads. It’s then up to you how much additional insurance cover you take out to protect yourself and others should an accident occur. While some states allow you to choose CTP insurance from a range of providers, others offer it through government-owned insurance commissions.

Compare Top Rated Car Insurance

How is the cost of third party property damage car insurance calculated?

The cost of third party property insurance is calculated based on a number of variables, and differs for drivers in different situations.

One consideration is the age of the driver. For younger drivers, premiums are usually higher, due to the fact that they are more likely to be involved in an accident. For older drivers with a clean driving history, premiums may be lower.

According to the Bureau of Infrastructure and Transport Research Economics, drivers under the age of 25 are most at risk of being hospitalised due to a car accident. Gender is also a factor, given males made up roughly 76% of all road fatalities in Australia in 2023.

In calculating what premiums to charge you, insurance providers will also typically consider:

• the make, model and age of your car
• your driving history
• your address
• how many kilometres you typically drive in a year
• whether or not you use the vehicle for commercial purposes
• if you’ve made any modifications to the vehicle.

How often do I pay insurance premiums?

Depending on your insurance provider, you might be able to pay your insurance premiums monthly, quarterly or annually. You may also be able to secure a car insurance premium sign-up discount, deal or offer if you decide to pay your car insurance premium annually instead of monthly or quarterly.

How to find the best third party property damage car insurance

To work out which insurer offers the best third party car insurance for you, there are several key factors to consider. The cheapest third party car insurance policy may not always be right for your needs, as:

• you may have to pay a higher excess in the event of an accident;
• there may be limits on how much you’re covered for;
• there’s often more exclusions, and;
• you may miss out on benefits such as coverage for uninsured driver damage.

That said, the overall premium an insurer charges and the excess you’ll pay when making a claim are often some of the first things to think about when comparing insurers. These can vary depending on your policy, and change due to factors such as your claim history, driving record and age. You may also be able to save on your premium by increasing your excess, but this means you’ll likely pay a higher cost out of your own pocket if you need to make a claim. Some insurers may also charge excesses when you make a claim, even if an accident isn’t your fault.

Comparing third party property car insurance providers can also be an effective way to secure a great deal. Providers often offer introductory and online discounts on new policies, plus discounts if you install safety equipment like alarms, or bundle multiple policies. It’s also important to check your policy’s PDS to see what exclusions may apply. Ultimately, choosing a policy that’s right for you and gaining quotes from different providers is a great way to find the best third party car insurance for you.

Can I reduce the cost of third party property damage car insurance?

If you’re trying to reduce the cost of your third party property damage insurance premiums, you could call your insurance provider to find out what options are available to you. For example, you may be eligible for a price reduction if you don’t allow anyone under the age of 25 to drive your car, if you’re eligible for a ‘no claim’ bonus, or if your insurer offers a “Named Driver” discount, which works by naming all potential drivers of your car on your policy.

Insurance premiums may also be cheaper if you have a clean driving history (also known as a ‘good driver discount’), low annual kilometres, or avoid making certain modifications to your vehicle. If you aren’t satisfied with your current insurer’s offerings, it could be worth considering what options may be available to you from other providers.

What is a no claim bonus?

A no claim bonus is sometimes included in certain policies. If you don’t make a claim for a certain period of time, you may pay a lower premium. It’s important to note if there are any limits or claims that may affect this bonus found in your policy’s PDS and other relevant documentation.

Do I have to pay an excess with third party property damage car insurance?

An excess is how much you will need to pay when making a claim on your insurance policy before your benefit kicks in. It’s likely that you will need to pay an excess if you claim on your third party property cover. Sometimes the excess will come directly out of the insurance payout, but this will vary depending on the insurer.

→ Read more: Car insurance, can you pay monthly at no extra cost?

If someone damages my car, am I covered?

Third party property damage car insurance is designed to cover you if you damage someone else’s vehicle, rather than cover the damage to your own car. There may be some limited circumstances when you may receive cover; such as if your car is damaged by an uninsured driver. If you are not at fault for the accident, the damage to your car may be taken on by the at fault driver’s insurance, if they have an eligible policy. If you wish to have cover for damage done to your car by another driver, regardless of their insurance, it may be worth considering taking out a different kind of cover, such as comprehensive car insurance.

What should I do if I have a car accident?

Insurance provider QBE advises that if you’re involved in a car accident firstly try and check if the accident scene is safe. If anyone is injured, or if there appears to be significant property damage, call the police and/or ambulance service immediately. Following an accident, if possible, collect contact details from any other driver or drivers involved, including:

• name
• address
• phone number
• registration number
• car insurance details

It can also be important to collect the contact details of any witnesses to the accident. All of these details will be useful later on when lodging a claim with your insurance provider.

Does third party property damage car insurance cover towing?

If your vehicle is damaged in an accident, then third party property damage insurance doesn’t cover towing costs for you. It may cover towing costs for other drivers involved in the accident if you’re found to be at fault.

How can I compare third party property damage car insurance?

If you’re interested in taking out third party property insurance, there is a wide selection of policies offered by different insurance providers. You can compare car insurance providers on Canstar. Once you have found a provider that suits your needs, you can obtain a quote on what premiums, inclusions and discounts they offer. You may also be interested in finding out more about Award-winning comprehensive car insurance providers, as rated by Canstar’s Research team for our Car Insurance Star Ratings and Awards.

Cover image source: tommaso79/Shutterstock.com