What is the Best Car Insurance in Australia?

To find the best comprehensive car insurance policies in Australia, it’s a good idea to understand the different types of car insurance available and decide which one suits your needs. Some cover is better for older drivers, while other policies represent the best car insurance for under 25-year-old drivers. There are even some comprehensive car insurers that specialise specifically in older or younger drivers - with their premiums priced accordingly.

Regardless, in some cases you have no choice because a basic level of car insurance is mandatory. You’ll not be able to drive in Australia without the required cover.

Types of car insurance available in Australia:

1. Compulsory Third Party (CTP) Car Insurance - Basic Cover: Mandatory for all drivers. - Protection: Covers you financially if you injure or kill someone in an accident. - Limitations: Does not cover damage to other people’s property or your own vehicle.

2. Comprehensive Car Insurance - Extensive Cover: Includes protection for your vehicle and other people’s property. - High degree of financial protection for various risks, including car accidents. - Covers indirect costs such as being without a car while it’s repaired. - Necessary for vehicles under finance, as some lenders require adequate insurance. - Ideal for broad financial protection, and those who can’t afford to repair or replace their vehicle independently, and can’t be without one for any length of time.

3. Third Party Property Damage Car Insurance - Cover: Protects against damage caused to another person’s property. - Options may include fire and theft cover for your own vehicle. - Suitable for cars with low repair or replacement value. - Ideal if you can manage without your car temporarily post-accident, theft, etc. - Cheaper than comprehensive cover, with fewer benefits.

4. Third Party Property, Fire and Theft Car Insurance - Cover: Includes all benefits of Third-Party Property Damage Insurance and also covers you for theft or fire damage to your car. In some cases, it also covers damage caused by an uninsured driver if you aren't at fault. - Best for drivers who need more cover than Third Party Property but find comprehensive insurance too costly. This is the cover most drivers consider the best car insurance on a budget. - Good cover to take out if you’re worried about your car's safety due to its parked location for much of the day.

How do you find the best comprehensive car insurance policy?

Start by evaluating the inclusions and exclusions. Here are some specific steps you can take when you’re checking out what each policy covers.

1. Look for additional risks that are - or aren’t - covered, and helpful inclusions like roadside assistance and windscreen replacement. 

2. Compare the maximum payout amounts for specific risks (e.g. theft, accident, vandalism, etc.).

3. Compare Premiums: Consider more than just the cost of your premium. Also look for discounts for buying online or paying monthly at no extra cost. Alternatively, some insurers offer discounts if you pay your annual premium upfront, or opt for direct debit.

4. Negotiate because some insurance providers might offer better prices than they initially quoted you, especially if you’re an existing customer. Don’t hesitate to ask for discounts.

5. Consider ‘Pay as You Drive’ cover if you don’t drive frequently. These premiums are based on estimated or actual kilometres travelled, potentially saving you hundreds on your premium.

6. Always read the Product Disclosure Statements (PDS) and Target Market Determinations (TMD) before buying your cover. This is to ensure the policy suits your needs and that you understand what is covered, and what’s not.

Key features to look for in car insurance:

• After-Accident Care: Services provided after an accident.

• Excess Options: Flexibility in choosing the level of excess you pay.

• Personal Items Cover: Protection for items inside the vehicle.

• Windscreen Cover: Coverage for windscreen damage.

• Roadside Assistance: Help available if your vehicle breaks down.

• Rental Car Costs: Coverage for rental cars if your vehicle is off the road.

What’s the best car insurance excess?

Higher Excess:

• Results in lower premiums.

• Higher out-of-pocket costs at claim time.

Lower Excess:

• Higher premiums.

• Lower costs when making a claim.

Weigh the trade-off between lower premiums now versus higher costs if you need to make a claim, and/or replace your vehicle entirely.

What’s the best car insurance in your location?

The state you live in has a big impact on whether or not you’re getting the best car insurance. Some states have additional taxes built into their CTP, and some don’t. This can affect your premium.

Other local considerations include assessing risks like floods or bushfires in your area and ensure your car is covered for these events, which might include:

• Flooding.

• Hail.

• Mudslides.

By understanding the types of car insurance available and carefully comparing policies, you can find the right car insurance for your needs and potentially save on costs. Prioritise the coverage features that are most important to you and consider the specific risks associated with your location to ensure you are adequately protected.

Sources:

https://www.statista.com/statistics/1310851/australia-weekly-car-insurance-per-household-capital-cities/

https://acxpa.com.au/call-centre-rankings/car-insurance/ https://www.productreview.com.au/c/car-insurance https://www.insurancebusinessmag.com/au/news/breakin g-news/these-are-the-top-10-car-insurance-companies-in- australia-230327.aspx 

https://www.whichcar.com.au/advice/why-your-car-insurance-premium-is-going-up

https://www.sa.gov.au/topics/driving-and-transport/registration/vehicle-insurance

https://www.creditone.com.au/news/2069/factors-that-impact-car-insurance-costs

https://www.ibisworld.com/au/industry/car-insurance/4122/

Paul Coughran is the General Manager of Emerging Verticals at Compare Club. Paul has over 20 years of experience across a wide range of industries including Banking and Finance, Telecommunications and Energy. Paul leads a team of trusted experts dedicated to helping individuals make informed decisions about their insurance and utilities needs.

Meet our car insurance expert, Paul Coughran

Paul's top car insurance tips

• 1

  Regularly compare your insurance policies – You could be paying for cover you don’t need. Shopping around every so often can save you a fair bit, maybe even hundreds each year.

• 2

  Don’t just look at the premium—check the excess too. While a higher excess might bring down your premium, remember you’ll have to fork out more if you do need to claim.

• 3

  Double-check what’s included in your policy. Extras like windscreen cover or roadside assistance might not be part of the deal and could cost you more.

• 4

  If you don’t drive much, consider usage-based insurance. Some policies base your cost on how much you actually drive, if you work from home or only use your car for short trips this might be a much better option.