Third party property damage car insurance

What is third party property damage car insurance?

It’s the most basic level of optional car insurance available to drivers in Australia. It provides financial cover towards expenses 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 consumers greater peace of mind than not having any. As a car accident can sometimes lead to the driver at fault being sued for damages to repair or replace another driver’s property.

Third party property damage car insurance coverage

It protects you financially in the event of an accident where you have caused damage to someone else’s property and are at fault.  If this occurs and you make an eligible claim to your insurer, this insurance should help towards repairs or the replacement costs incurred by the other party. But, keep in mind your policy may contain a pre-agreed limit as to how much the insurer 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 from your insurer.

It’s also important to know that third party property damage car insurance does not cover the costs of repairing or replacing your own vehicle. For this type of cover, you may choose to look into a more extensive type of car insurance, such as third party fire and theft or a comprehensive car insurance policy.

→ Read more: What is comprehensive car insurance?

Third party property damage car insurance exclusions

This type of insurance doesn’t include any cover for events and problems that may happen to you or your vehicle. If you want cover for theft, malicious or accidental damage to your car, fire, storm or hail damage, then you will 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 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 compulsory 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 caused by you. This differs from third party property car 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. It’s important to remember that neither CTP nor third party property covers you or your vehicle. If you want protection for you, other nominated drivers and your vehicle, you will generally need to purchase additional insurance such as a comprehensive car insurance policy. You may be able to access some cover for your own medical treatment via CTP though, depending on where you live and the circumstances of your accident.

Each state and territory government requires all vehicles to be registered and have CTP insurance in place before being driven on our roads. It is 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.

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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.

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 factor in the make, model and age of your car, your driving history, your address, how many kilometres you typically drive in a year, and whether or not you use the vehicle for commercial purposes.

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?

When deciding what third party property car insurance is right for you, there’s several key factors to consider. The overall premium charged by your insurer and the excess you pay when making a claim is often the first thing to think about. This depends on your policy, but can 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 only if you’re able to cover a higher cost in the event that you need to make a claim. Some insurers may also charge excesses, even if an accident isn’t your fault.

A no claim bonus is sometimes included in certain policies. This applies when you don’t make a claim for a certain period of time, allowing for a lower premium. It’s important to note if there’s any limits or claims which may affect this bonus. This can be found in your policies’ PDS and other relevant documentation.

Comparing car insurance providers is also an effective way to secure a great deal. Providers often offer introductory and online discounts on new policies. Discounts on multi policy bundles and installation of safety equipment, such as alarms, can also be considered. It’s also important to check your policies’ PDS to see what exclusions may apply. Ultimately, choosing a policy that’s right for you and gaining quotes from different providers is the best way to find good quality third party property car insurance.

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

If you are trying to reduce the cost of your third party property damage insurance premiums, it’s a good idea to call your provider and 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.

In addition to this, premiums are usually cheaper if you have a clean driving history, 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.

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

An excess is an amount 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 one if you claim on your third party property cover.

→ 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 in the event that you cause damage to someone else’s vehicle, rather than cover the damage to your own. There are some limited circumstances in which you may receive cover; like if your car is damaged by an uninsured driver. If you wish to have cover for damage done to your car by another driver, 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 are 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 or an ambulance 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 are found to be at fault.