Comparing Car Insurance in Australia (2026): Cover Levels, Costs, and Key Policy Choices
Why comparing car insurance matters
Car insurance can help protect you financially if your vehicle is damaged, stolen, or involved in an accident. It can also cover your legal liability for damage you cause to other people’s vehicles or property. In Australia, Compulsory Third Party (CTP) insurance is the minimum legal requirement in all states, but it only covers injuries or death caused to other people in an accident where you are at fault. It does not cover damage to vehicles or property.
Many drivers therefore consider additional cover such as Third-Party Property, Third-Party Fire & Theft, or Comprehensive insurance. With premiums rising, comparing policies becomes more than a price exercise: it’s also about understanding what you’re actually covered for, what you’ll pay out of pocket if you claim, and which optional benefits you may (or may not) need.
The main types of car insurance cover
Car insurance policies generally fall into four broad categories, each providing a different level of protection.
Compulsory Third Party (CTP): Mandatory cover for injuries or death caused to other people in an at-fault accident. It covers medical costs, rehabilitation, and compensation. It does not cover vehicle or property damage.
Third-Party Property: A basic policy that covers damage you cause to other people’s vehicles or property in an accident where you are at fault. It does not cover damage to your own vehicle, and it does not cover fire, theft, or weather-related incidents.
Third-Party Fire & Theft: A mid-level option that covers your liability for damage you cause to other people’s vehicles or property, plus protection for your own car against fire and theft (including attempted theft).
Comprehensive: The highest level of cover, typically including damage to your own vehicle in an accident, third-party vehicles and property, and a range of other insured events such as storms, hail, fire, floods, theft, and attempted theft. Comprehensive policies often include a new car replacement if your vehicle is written off within a certain period after purchase.
While comprehensive insurance offers broader protection, it generally costs more than basic third-party policies. The best choice depends on your needs and budget, and it’s important to read the fine print to understand inclusions, exclusions, limits, and sub-limits.
Optional extras that can change the value of a policy
When comparing comprehensive policies, the optional benefits (and their limits) can make a meaningful difference. Common optional extras include:
Hire car after an incident: Provides a rental car if your vehicle is out of action after an incident, regardless of who is at fault. Many insurers apply a daily dollar limit and a time limit (often up to 21 days), though some offer unlimited days while your car is being repaired (or until it’s determined as a write-off).
Roadside assistance: Also known as breakdown cover, this can help if your vehicle breaks down or won’t start, including issues like a flat tyre or needing a jump start.
Windscreen or window glass cover: Can reduce or remove the excess for windscreen or window glass repairs if that is the only damage from an incident.
Choice of repairer: Lets you nominate your preferred repairer if your car is damaged in an accident or other insured event.
Optional benefits typically come with an added premium, so comparing policies involves weighing the extra cost against how likely you are to use the benefit.
Understanding excess: what you pay when you claim
An excess is the out-of-pocket amount you contribute when you make a claim. For example, if your standard excess is $800 and you make a repair claim for $5,000, your insurer would cover the remaining $4,200.
A standard excess generally applies to insured events under a car insurance policy. However, you may have to pay additional excesses depending on who was driving. For instance, if a young driver under 25 causes an accident while driving your car, you may need to pay the standard excess plus an additional young driver excess.
Your excess per claim or incident is outlined in your Product Disclosure Statement (PDS), typically under an “Excess on Claims” section, and it should also appear on your Certificate of Insurance.
Most insurers allow you to adjust your standard excess. Increasing your excess can lower your premium, and reducing your excess can increase your premium. In some situations you may not have to pay an excess, such as when another driver is shown to be responsible and you can provide their name and address and their vehicle registration number.
What car insurance can cost, and why prices vary
Car insurance can cost between $30 and $250 per month based on analysis of a selection of quotes, though costs may be higher if you are considered high-risk by an insurer. The amount you pay is your premium, and insurers may offer ways to lower it, such as discounts for signing up online or paying annually rather than monthly.
Premiums can also rise across the market. Recent inflation figures indicate premiums increasing annually, contributing to average yearly premiums across capital cities being close to $2,500 (around $206 per month). With costs moving, comparing quotes and policy settings can be a practical way to manage your budget.
Key factors that impact your premium
Insurers price policies based on a range of details about you, your vehicle, and how it’s used. Factors commonly affecting premiums include:
Level of cover: Third-Party Property is generally cheaper than Comprehensive.
Drivers listed on the policy: Adding drivers can increase your premium. Young drivers under 25 generally pay more due to higher accident risk and may trigger additional excesses.
Optional benefits: Extras such as roadside assistance, hire car, and windscreen protection typically increase premiums.
Excess settings: A higher excess can reduce premiums; a lower excess can increase them.
Vehicle details: Make, model, age, and condition matter. More valuable vehicles may cost more to insure, and common models may be cheaper to repair due to accessible parts.
How the car is used: Private use is usually cheaper than business use.
Whether the car is under finance: Some insurers ask this due to administrative steps if the car is written off with finance owing.
How much you drive: Insurers assess risk partly based on time on the road. Australian motorists drive an average of 15,000km per year.
Claims history: Recent at-fault claims can increase premiums. Some policies include a no-claim bonus that reduces costs if you haven’t made a recent at-fault claim.
Where you park and where you live: Parking in a garage or within your property boundary can reduce premiums compared with street parking. Your postcode can also affect premiums, including if you live in a flood zone or a densely populated area.
Market value vs agreed value: choosing how your car is insured
For comprehensive cover, you may be able to choose between market value and agreed value. This choice affects how much you could receive if your car is written off or stolen.
Market value: The insurer’s estimate of your car’s selling price at the time of the claimable event. Insurers may assess market value using factors like make, model, age, mileage, condition, local market prices, comparable online sales, and market trends. In some cases, they may use industry publications and tools such as Glass’s Guide. Market value may not include costs such as registration, CTP, stamp duty, or transfer fees, which could become out-of-pocket expenses in addition to any excess.
Agreed value: A fixed dollar amount negotiated with the insurer when you take out the policy, which applies regardless of depreciation during the policy term. When quoting, you may be offered a value range to choose from (for example, $20,000–$25,000). Some providers may not insure vehicles older than 10 years for agreed value.
If you already have an agreed value policy and believe your car’s market value is higher than the agreed value listed, you could consider switching to market value coverage or increasing the agreed value if your insurer allows it. To check what you’re currently insured for, review your Certificate of Insurance or policy details for the “amount covered,” which is the maximum your insurer will pay for loss or damage to your car.
Practical comparison tips before you buy
Compare beyond the premium: The cheapest cover may not always be the best option if it leaves you underinsured and exposed to large out-of-pocket costs.
Read the PDS and check your Certificate of Insurance: Look for excess amounts, optional benefits, limits, and conditions.
Review your excess settings: Decide what you can realistically afford to pay if you need to claim.
Consider whether you need optional extras: Hire car, roadside assistance, and windscreen cover can be useful, but they usually add to your premium.
Use the cooling-off period if needed: All insurers offer a cooling-off period after purchase, typically ranging from 14 to 30 days, with many offering 21 days.
Ultimately, comparing car insurance in Australia is about matching the level of cover, valuation method, excess, and optional benefits to your circumstances—then confirming the details in the policy documents before you commit.