How Much Car Insurance Do I Need?

To legally own and drive a vehicle in Australia, you must have at least one form of car insurance. This mandatory coverage is referred to as “compulsory third party,” or CTP insurance. Although this type of insurance is required, the car insurance market is saturated. It can be tough to decide which insurance company is right for you and what type of coverage will meet your needs.

Of course, some consumers may opt for the minimal, legally required CTP insurance only. While this may be a short-term solution to budgeting, it is a decision that is likely to cost you more money in the long run. Often, cheaper coverage means less coverage, which can put you in a position to pay out of pocket for incurred expenses. Expenses that would be covered under a more comprehensive insurance plan may become your responsibility if you are involved in an accident, regardless of who is at fault.

What does CTP Insurance Cover?

Compulsory third-party insurance is the legal standard for Australian car insurance. It is illegal to drive in any state or territory of Australia. CTP car insurance covers the drivers or passengers of another vehicle who might be injured if you are involved in a car accident. However, the driver and passengers inside your car are not covered by CTP.

Compulsory third-party insurance also does not cover harm to your vehicle, the other party’s vehicle, or property damage that occurred as a result of the collision. The premium for this type of insurance policy is low because the scope of coverage is so small. Suppose you only have this type of insurance and are involved in a motor vehicle accident. In that case, you will likely be held responsible for a considerable amount of damages.

What are my Other Options?

Another form of car insurance a consumer may add to their CTP insurance is third-party property coverage. This type of insurance policy covers any damages inflicted to other vehicles or property if you are involved in an accident. Although some insurance companies may be willing to cover certain damages if the other vehicle was uninsured, it does not cover your car. Third-party fire and theft coverage is another option for additional coverage. Third-party fire and theft insurance will protect your vehicle if it is harmed due to fire or stolen. The most thorough type of car insurance available is comprehensive car insurance.

Comprehensive Car Insurance


Comprehensive car insurance is arguably the best type of insurance on the market. While a consumer’s needs may vary from vehicle to vehicle, comprehensive coverage is the most absolute protection an insurance company can offer. This type of insurance covers damage inflicted to your car, other cars if you were at fault for the accident, and property damage. Comprehensive car insurance also covers injuries sustained by any person involved in a traffic collision. A comprehensive insurance policy covers theft, fire damage, and even some natural disasters, like tornados. Despite a higher premium, comprehensive car insurance guarantees total coverage in the event of practically anything.

Automobile insurance can be expensive, and if you are a safe driver, you may be reluctant to purchase more costly types of coverage. Unfortunately, natural disasters, riots, and car accidents are unplanned and often unavoidable events. The comprehensive car insurance market is competitive, so if you shop around, you can likely find an insurance plan that is high in protection and affordability. Online tools like iSelect’s insurance comparison can help narrow down your options. Consider comparing insurance policies by price, deductible, and security to find which plan will be most beneficial for you.