There are four types of Insurance that can be purchased in Australia. It is important to understand what each type of coverage does, and what it does not do. Why? Moneysmart, on the government site, states it is the best way. They say that when picking out the insurance type that you want you must think about whether you can live without your car or not. Some of the coverage will not cover your vehicle so you need to decide if this is important to you or not.

  1. Compulsory Third Party Insurance (CTP)-This type is the bare minimum that is required in any state that you drive in. You cannot register your car without having proof of insurance in NSW. In the other states, you pay for the insurance when you register your car because it is included in the price. Each State will differ in how much the minimum amount of coverage is, so depending upon where you live you may have a higher rate than your neighbor across the boundary line.
    1. It does cover injury or death to the other person involved in an accident.
    2. It does not cover damage to any vehicles or property. This includes your personal car or theirs.
    3. Does not cover theft.
  2. Third-Party Property Insurance-This type of insurance is designed to cover you against all third-party legal claims that may be filed against you. What this means, in basic terminology, is that if you cause harm to someone else’s property in an accident, your policy will cover the costs up to a set amount. The amounts of the payouts are decided in a court of law.
    1. Damage to another person’s car, or property, is covered up to a set amount.
    2. Does not cover harm or death to others involved.
    3. Does not cover any personal damage to your vehicle or property.
  3. Third-Party Property with Fire and Theft Insurance-This type of insurance is a combination of a couple of policies. It will cover you against all legal claims, just like regular third-party property policies, up to a set amount. It also covers you for theft and specific fires.
    1. Covers damage to another person’s vehicle, or property, up to a set amount decided by the courts.
    2. Covers accidental fires, such as a house fire that engulfs your vehicle.
    3. Covers the arson of your car or truck.
    4. Covers theft of your vehicle or any damage done.
    5. Covers attempted theft damages, such as a broken window or door handle.
    6. Does not cover injury or death to anyone else involved.
    7. Does not cover damage to your vehicle.
    8. Does not cover setting your own vehicle on fire.
  4. Comprehensive Insurance-Comprehensive injury is a combination of the second and third policies, with some added benefits. When getting car insurance in QLD, or anywhere else in Australia, this is the best of the best.
    1. Covers damage to another person’s property, or vehicle, up to a set amount that will be decided in a court of law.
    2. Covers damage to your vehicle, regardless of who is at fault.
    3. Covers accidental fires that spread to your vehicle.
    4. Covers your vehicle if it is set on fire by someone else.
    5. Covers any damage is done to your car or truck in the case of theft.
    6. Covers damage done to your car in the case of attempted theft.
    7. Covers your personal effects up to a decided-upon amount.
    8. Covers damage to your car due to weather and mother nature.
    9. Covers Emergency transport if you are stranded, or it will cover one night at lodging when you are stranded.
    10. Covers the cost of the tow bill up to a set distance.
    11. Covers the cost of broken or damaged glass.
    12. Covers the cost of a car rental until your vehicle is repaired or replaced if you are found to not be at fault.
    13. Payout the replacement cost, or a set cost that was decided upon, of the vehicle if it gets totaled.
    14. It does not cover injury or death to others involved in the accident.
    15. It does not cover setting fire to your own car.

When looking over this breakdown of the four coverage types you will have to keep in mind one thing. The first one, CTP coverage, is required so that coverage type will be added to any other policy that you add on to it. Comprehensive is obviously the best choice, and the one that you should have if you drive around in a newer car, or an expensive collectable one. If you cannot afford this type of insurance, with that type of car, then you probably should not have the car that you do.

If you have an old car that is not worth much you may want to simply get the second or third option to cover more than the basic coverage. If your vehicle is not even worth bothering about, the required coverage policy will work just fine for you.

The type of policy that you get depends upon you. Your area that you live in, how you drive, what you drive, how your pocketbook looks, and every other aspect of your personal self when it comes to driving. Think about what you truly need, and what you can afford, and go from there.