What is comprehensive car insurance?

What is comprehensive car insurance?

Comprehensive car insurance is the most extensive form of optional car insurance available in Australia. It generally provides more coverage than Third Party Fire and Theft and Third Party Property Damage policies, but often at a higher cost.

What does comprehensive car insurance cover?

A comprehensive car insurance policy can provide coverage for damage you cause to other people’s vehicles and property, as well as cover your own vehicle if it is damaged by fire, stolen by thieves or damaged in an accident—regardless of who was at fault.

Additionally, most insurance providers allow you to purchase a range of optional extras, such as free car hire after an accident while your vehicle is being repaired, and excess-free windscreen replacement. You may also be given a choice between insuring your car for its market value or agreed value, which will determine the amount of money you can receive to replace it, should it be written-off or stolen.

It’s often a good idea to compare a few policies from different providers to ensure your policy meets your specific needs and is offering you good value for your money.

What does comprehensive car insurance not cover?

It may be a comprehensive policy, but there are still certain things comprehensive car insurance generally won’t cover. Your policy’s Product Disclosure Statement (PDS) will often contain an extensive list of exclusions or situations in which you will not be covered.

Don’t be too concerned, however, as many of the most common exclusions are avoidable by using common sense and rarely a problem if you drive responsibly. Most notably these are: driving under the influence of drugs or alcohol, driving while unlicensed or driving an unregistered vehicle. Likewise, you may find your claim rejected if your car is considered unroadworthy or has received modifications that you haven’t notified your insurer about.

How much does comprehensive car insurance cost?

The cost of comprehensive car insurance premiums depends on a range of factors, such as the type of vehicle you want to insure, your age, your location and even your gender. As it’s the most extensive form of optional cover, comprehensive car insurance is generally the most expensive.

Premiums are generally lower for those aged over 50 than for younger drivers, as insurers often consider younger drivers as being less experienced and therefore more likely to make a claim. Similarly, insuring an older car can often be cheaper, due to the fact that older cars generally have a lower market value and therefore cost less to repair or replace, according to Canstar Research.

While premiums are one factor when considering an insurance policy, it’s also a good idea to also check the policy inclusions and excess options. Your excess is the amount of money you have to pay to your provider should you need to make a claim. Agreeing to a higher excess could help you save money on premiums, but if your excess is too high and you need to make a claim, this could end up negating any savings you make from a lower premium.

Is comprehensive car insurance mandatory in Australia?

While comprehensive car insurance is optional in Australia, Compulsory Third Party (CTP) insurance, also known as Green Slip insurance in New South Wales and Motor Accident Injuries insurance in the ACT, is mandatory in every Australian state and territory. It is a legal requirement, as part of registering your vehicle, to have a valid CTP insurance policy in place before using Australian roads.

How to choose the right comprehensive car insurance policy

Choosing the right comprehensive car insurance policy for you will ultimately depend on your needs, preferences and circumstances. A few things to consider when comparing policies though are:

• Premiums: The cost of a policy is usually one of the first things people look at when comparing providers. While it isn’t the only thing to consider, the cost of the premiums you’ll have to pay can help you work out if a policy is offering you good value for your money.

• Excess amount: This is the monetary amount that you must contribute when making a claim in certain circumstances. Some providers may allow you to change your excess amount, with a higher excess usually meaning a lower premium. That being said, if you had to make a claim, you would have to contribute this higher excess amount.

• Optional coverage options: Most comprehensive policies will offer optional extras, some at an additional fee. Extras can include excess free windscreen replacement, personal effects cover, hire car and towing coverage after an accident, roadside assistance and choice of repairer.

• Deals and discounts: While a deal or discount shouldn’t be your only consideration when choosing a policy, they can be a bonus worth considering. Many providers offer online discounts for new customers in the form of a percentage or cash discount off the first year’s premium, while others may offer multi-policy discounts (if you already have other forms of insurance with the provider) or safe driver/no-claim discounts.

How to save on comprehensive car insurance premiums

Here’s a few things you can consider if you’re looking to save money on your car insurance:

• Buy online: Many car insurance providers offer discounts for customers who take out a policy online, rather than over the phone or in person.

• Pay annually rather than monthly: While paying monthly or fortnightly might be more convenient for budgeting, many car insurance providers offer discounts to customers who pay their premiums annually in one lump sum.

• Choose a higher excess amount: Some providers may allow you to change your basic excess, with a higher excess amount generally meaning lower premiums in return. That being said, you would need to contribute this higher excess amount were you to make a claim.

• Drive safely: Safe drivers are generally less likely to be involved in road accidents and therefore make less car insurance claims. Providers often reward this with safe driver discounts or no-claim discounts/bonuses.

• Drive less: If driving less is an option, you may be able to save on your car insurance by taking out a pay as you drive or low kilometre policy. These policies generally put a limit on the amount of kilometres you can drive per year, but in return offer lower premiums.

• Keep your car secure: Car insurance providers will often ask where your vehicle is parked both during the day and at night. Parking your car in a secure or lockable carport, garage or parking space can mean lower premiums, especially when compared to those who park their vehicles on the street at night.

• Bundling your policy with other insurance products: If you already have other forms of insurance (e.g. home insurance) with a provider, you may be offered a discount for bundling your policies, often referred to as a multi-policy discount.

• Shop around: Taking your time to compare different policies from different providers can often help you save money on your car insurance, while also helping you find a policy that best suits your needs and circumstances.

What are the common exclusions in comprehensive car insurance policies?

As mentioned above, there are certain situations that comprehensive car insurance won’t cover. These are known as exclusions and are often listed in your policy’s PDS. Some common exclusions for a comprehensive car insurance policy are:

• Driving under the influence of alcohol or drugs (which could include some prescription medication)

• Driving without a valid driver’s licence or not obeying the conditions or restrictions of your licence (e.g. driving a class of vehicle that is not covered by your licence)

• Leaving your car unlocked or valuables within it

• Driving dangerously, such as by speeding or not obeying the road rules

• Engine failure and general wear and tear

• Modifications to your car that make it unsafe or illegal to drive, or any modifications you have made to the car without informing your insurer

• Neglicting to maintain your car, such as not fixing something that’s broken like a brake light or indicator, skipping car services or driving your car while damaged

• Occupational use of your car, such as using your vehicle for ridesharing or food delivery, without letting your insurer know first

• Overloading your car, whether that be too many passengers for official seating capacity, or carrying a load that is heavier (or bulkier) than what the car could reasonably be expected to tolerate.

Comprehensive car insurance vs. third-party insurance: What’s the difference?

While both are forms of optional car insurance, comprehensive and third party insurance policies will differ on what they cover, as well as their price.

Third Party Property Damage

Third Party Property Damage is the most basic and often cheapest level of optional car insurance. It provides cover should you cause damage to someone else’s property with your car—for example, someone’s vehicle, boat, caravan or home. It also includes liability cover, meaning it will provide financial assistance if you become involved in legal proceedings as a result of the property damage caused.

Third Party Fire and Theft

Third Party Fire and Theft insurance is a step up from Third Party Property Damage insurance, both in terms of the cover it provides and the cost of that cover. In addition to covering damage to other people’s property, Third Party Fire and Theft policies also provide a degree of cover for your own car if it’s damaged or lost due to fire or theft. However, it doesn’t provide cover for damage to your vehicle resulting from a driving accident, or from other types of natural disasters, such as storms and hail or floods.

Comprehensive

Comprehensive car insurance includes everything that is covered by Third Party Fire and Theft, while also providing cover for your own vehicle if it is damaged in a road accident or by a variety of other insured events.

The table below provides a quick overview of what each type of car insurance covers.
← Mobile/tablet users, scroll sideways to view full table →

What optional extras are available with a comprehensive car insurance policy?

The optional extras available with comprehensive car insurance vary depending on the provider and policy you choose. Typical extras can include:

• Personal effects cover, which is a set amount to replace lost or damaged personal belongings after an accident

• Emergency transport and accommodation cover to assist should you be stranded due to your car no longer being safe to drive

• Towing if required following an accident or breakdown

• Open driver cover to ensure anyone that drives your car is covered by the policy, rather than just the listed driver/s

Extras that usually incur an additional fee and increase the cost of your premiums include the use of a hire car while your car is being repaired, reduced or no excess replacement of damaged windscreens and windows, roadside assistance, no-claim bonus protection and the option to choose your own repairer.

What is the difference between comprehensive car insurance and CTP?

Every registered vehicle in Australia is legally required to have Compulsory Third Party (CTP) insurance, whereas comprehensive car insurance is optional. The main difference between comprehensive and CTP, is that CTP covers people, while comprehensive insurance covers damage to vehicles and property.

CTP protects drivers from personal injury liability that might arise if you are at fault in a car accident that causes fatal injury or harm to another person. It doesn’t provide any cover for vehicle damage.

Does comprehensive car insurance include CTP?

Comprehensive car insurance does not include CTP insurance. CTP is a mandatory type of insurance which needs to be purchased separately and prior to you driving the vehicle. It’s often included as part of the car registration process.

How do I make a claim with my comprehensive car insurance policy?

Many comprehensive car insurance providers will allow you to make a claim either over the phone or online, 24 hours a day. It’s important to give them as many details as possible regarding what has happened—including any photos or videos of the event—to help them accurately assess your claim.

If another driver is involved you should try to give your insurer that driver’s name, contact details, vehicle make, model and registration, and insurance information (if they are insured). Your insurer will usually arrange for the assessment and any repairs required, as well as manage all communications with the other driver and their insurance provider, if applicable, regardless of who is at fault.

Does comprehensive car insurance cover both electric and petrol cars?

Yes, comprehensive car insurance can also provide coverage for electric cars. With more hybrid and electric cars on our roads and data from the Federal Chamber of Automotive Industries (FCAI) showing increased sales for new eco-friendly vehicles (especially hybrid and plug-in hybrid vehicles), it makes sense that car insurance providers would also offer their products to these drivers.

If you’re in the market for a new green vehicle, there are several lenders offering Green Car Loans on Canstar’s Database—which are specific car loans to help fund an eco-friendly vehicle purchase.

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