Understanding Car Insurance Options in Western Australia: Cover Levels, Excess and Value
Car insurance basics in WA
If you’re new to driving or new to Western Australia, it helps to understand the basics of car insurance and what different policies are designed to cover. A car crash—no matter how serious—can be a frightening experience, and the financial impact can also be significant. Car insurance is intended to help cover the costs associated with incidents such as a crash, theft, or damage to your vehicle.
In general terms, when you take out a car insurance policy, you are arranging cover for your car (depending on the policy you choose) and potentially the other driver’s car or property. Without appropriate cover, if you’re involved in an accident you could be considerably out of pocket.
Types of car insurance cover
There are different types of car insurance, and choosing the right level of cover involves thinking about what you want protected and what you could afford to pay yourself if something goes wrong. Consider how much your car is worth, what you’d like to be covered for, and what might happen if you don’t have the right cover.
Common cover levels can be summarised as follows:
Comprehensive cover: described as the highest level of protection for accidental loss, destruction, or damage.
Fire, theft and accidental damage to others’ property: covers fire and theft of your car, plus accidental damage to other people’s property.
Third party property damage: covers accidental damage to another person’s car or property.
When comparing policies, it’s important to look beyond the label and understand what is included, what is limited, and what is excluded. Policy benefits are typically subject to conditions, limits, and exclusions, which are set out in the relevant policy documents.
Compulsory motor injury insurance in Western Australia
In WA, there is also Motor Injury Insurance, often referred to as compulsory third party (CTP). This cover is mandatory and is paid as part of your car registration with the Department of Transport.
It’s important to understand what this compulsory cover does and does not do:
It covers the cost of personal injury to others if you’ve caused a crash.
It does not cover damage to vehicles or other things you may hit in a collision.
Because compulsory motor injury insurance does not cover vehicle or property damage, drivers often consider additional car insurance (such as comprehensive or third party property cover) depending on their needs and budget.
Understanding the excess
The excess is the amount you need to pay towards settlement of any claim. Depending on the policy, there can be additional excesses in certain situations—for example, an additional excess for young drivers.
When obtaining a quote, you may be able to choose a lower or higher basic excess. One example range provided is a basic excess between $400 and $2000. Selecting an excess is a balancing act: a higher excess can change the cost of cover, but it also means you may need to pay more if you make a claim. It’s also important to take into account any limits that apply to additional or optional benefits when choosing your excess.
How your car’s insured value can be set
Another key decision is how much you insure your car for. When you get a quote, you may be given a range of amounts you can insure your car for, based on the current market value. Within that range, you can choose an “agreed value” depending on what works best for you.
Thinking through value is part of choosing suitable cover. Alongside the type of policy and the excess, the insured value can influence how you approach the cost of insurance and the level of financial protection you want.
Choosing cover that fits your needs and budget
There are ways to pay less for car insurance, but it remains important to select cover that is right for you. A practical starting point is to choose the right level of cover—consider whether you need comprehensive car insurance or whether third party cover will do. From there, you can look for insurance that best suits your needs and fits within your budget.
Because every driver’s circumstances differ, the most suitable option depends on factors such as how much your car is worth, how you use it, and how comfortable you are with paying some costs yourself if an incident occurs.
Important documents and suitability
Any overview of cover types is only a summary. Before making a decision, it’s recommended that you read the policy documents to see whether a policy is right for you. Product Disclosure Statements and Target Market Determinations outline what’s included and provide guidance to help you understand the general suitability of the product.
In addition, cover and benefits are subject to conditions, limits, and exclusions set out in the relevant documents. Checking these details before you buy can help you avoid surprises later, particularly around what is covered, how claims are settled, and what excesses may apply.
Discounts, membership and support
Some insurance discounts may be subject to minimum premiums, and discounts may only apply until a minimum premium is reached. In some cases, certain members may be entitled to an insurance discount once they have been a member for at least five consecutive years, while members who only have insurance may not receive membership discounts on insurance cover. Membership may be limited to individuals and may not apply to associations, entities, or superannuation funds.
Some insurers also describe support options for customers, including support for family violence, financial hardship, accessibility, and specialist services. If you think you may need this kind of assistance, it can be helpful to ask what services are available and how to access them.
A final checklist before you decide
Confirm whether you want comprehensive cover or a third party option.
Understand what compulsory motor injury insurance covers in WA—and what it doesn’t.
Choose a basic excess you could afford if you needed to claim, and note any additional excesses.
Review the insured value options offered in your quote, including any agreed value range based on market value.
Read the policy documents (including the Product Disclosure Statement and Target Market Determination) to check conditions, limits, and exclusions.
Taking the time to compare cover types and read the relevant documents can help you select a policy that matches your needs, your vehicle, and your budget.