What is comprehensive car insurance?

Finance Writer · 19 April 2021
As its name suggests, comprehensive car insurance is the most all-encompassing form of car insurance in Australia. Depending on your circumstances, it could come with the price tag to match, but this doesn’t necessarily need to be the case.

While comprehensive car insurance is optional, and its price and features can vary from one insurer to another, there is little doubt it can provide significant peace of mind and financial protection for your vehicle and those around you. So, what exactly does it cover and how does it differ from other, potentially less expensive, car insurance options? Canstar explains.

What is comprehensive car insurance?

Comprehensive car insurance is the most extensive car insurance available in Australia. It covers you for everything included in third party fire and theft insurance (namely, damage to other people’s property and damage to your own car caused by fire or theft), as well as for damage caused to your vehicle in an accident, regardless of who was at fault. Additionally, most insurers allow you to purchase a range of optional extras, such as free car hire while yours 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.

What is covered under comprehensive car insurance?

Comprehensive car insurance typically covers damage to your vehicle, as well as to other people’s vehicles or property, even if you are at fault. It will also cover damage caused by fire, hail and storms, and replacement costs if your vehicle is stolen or written-off.

In addition to these standard inclusions, insurers often offer a range of extras. Some will be included in the policy, while others may be optional and incur additional fees or higher premiums. It’s a good idea to compare a few policies from different insurers to ensure your policy meets your specific needs.

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

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

  • Personal effects cover: 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 or drivers.

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, no-claim bonus protection and the option to choose your repairer.

Are there any exclusions with comprehensive car insurance?

It may be comprehensive car insurance, but there are still certain things it generally won’t cover. Your product disclosure statement (PDS) will more than likely contain an extensive list of exclusions, but don’t be too concerned, as many of the most common exclusions are common sense and rarely a problem if you drive responsibly. Most notably, damage caused if the driver is under the influence of drugs or alcohol, unlicensed or driving an unregistered vehicle won’t be covered. Likewise, you may find your claim refused if your car is considered unroadworthy or has received modifications that you haven’t notified your insurer about.

Is comprehensive car insurance compulsory in Australia?

While comprehensive car insurance is optional, compulsory third party (CTP) insurance, also known as ‘Green Slip’ insurance in New South Wales, is compulsory in every Australian state and territory. Before registering your vehicle and getting behind the wheel, it is a legal requirement to have a valid CTP insurance policy in place.

What is the difference between comprehensive car insurance and CTP?

Every registered vehicle is legally required to have compulsory third party (CTP) insurance. The main difference between comprehensive and CTP is that CTP covers people, while comprehensive insurance covers damage to vehicles and property.

CTP is compulsory protection from the personal injury liability that might arise, should you be at fault in a car accident that causes injury or death 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 is often included as part of the car registration process. Comprehensive car insurance does, however, include the types of cover that third party property and third party fire and theft insurance would provide, as well as additional cover such as for damage to your own car in an accident.

What is the difference between comprehensive car insurance and third party property, fire and theft?

Comprehensive car insurance includes everything that is covered by third party property and third party fire and theft. However, you have the option to purchase either of these types of car insurance as standalone policies if you don’t want to pay for full comprehensive insurance.

Third party property is the most basic level of optional car insurance. It provides cover should you cause damage to someone else’s property – for example, someone’s car, 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 insurance is a step up from third party property, 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 insurance also provides 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.

The table below provides a quick overview of what each type of car insurance covers.

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Damage to
your car
Damage to
person’s car
or property
Damage or
loss caused
by theft
Injuries or death
to other people
in an accident
CTP No No No Yes
Third party
No Yes No No
Third party
fire & theft
No Yes Yes No
Comprehensive Yes Yes Yes No

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 is the most extensive cover, comprehensive car insurance is generally the most expensive. An analysis of Canstar data of comprehensive car insurance premiums in 2020 found annual premiums ranged from $650 to more than $2,500.

Premiums are generally lower for those aged over 50 than for younger drivers. For example, average premiums for cover for a 50-year-old in New South Wales came to $998 per year. In comparison, a male under the age of 25 in NSW could be paying an average of $2,471 – more than double their older counterpart’s premium. 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 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 insurer 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.

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 is important to give them as many details as possible regarding what has happened, including any photos 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 contact details, vehicle make, model and registration, and insurance details, if available. Your insurer will usually arrange for the assessment and any repairs required, as well as manage all liaison with the other driver and their insurer, if applicable, regardless of who is at fault.

Image source:  lightpoet/shutterstock.com

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This content was reviewed by Finance and Lifestyle Editor Shay Waraker and Sub Editor Tom Letts as part of our fact-checking process.

Katie covers all things personal finance for Canstar. Katie has worked with companies including American Express, Virgin Money and Hollard Insurance. She has contributed to publications including The Australian, The Australian Financial Review and The Financial Times.

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