Car Insurance Frequently Asked Questions

Car insurance helps cover you for expenses incurred as the result of a car accident, fire, or theft. The extent of cover will depend on your insurer and type of policy.

Coverage can range from compulsory third-party, which generally covers injury and death to other parties (but will not cover any damage to property, including any cars involved in the accident), right up to comprehensive car insurance, which can help cover damage to your own car and third-party property in the event of an accident.

There are four main types of car insurance in Australia:

1. Compulsory third-party insurance (CTP) (also called Green Slip in NSW)
2. Third-party property
3. Third-party fire and theft
4. Comprehensive

It’s important to remember that CTP insurance does not provide coverage for any damage done to your or any third party’s vehicle or property.

CTP insurance varies from state to state. However, it will generally provide cover for any third parties who may be injured or killed in an accident involving your vehicle.

CTP insurance (or ‘Green Slip’ as it’s called in NSW) is compulsory third-party insurance.For more information, see NSW Government, State Insurance Regulatory Authority – What am I covered for? This can be included in the vehicle’s registration, depending on which state the vehicle is registered in.

It only covers claims for injury or death caused in an accident. It’s important to note that it doesn’t cover any costs related to third-party property damage, meaning that if you hit another vehicle, you are likely to foot the bill. However, a third-party property policy (the next level up in car insurance) could help cover some of these costs.

There’s no such thing as the ‘best’ car insurance. At iSelect, we can help you compare policies from our range of providers to help you look for a suitable policy.

A nominated driver is a driver of your car that you have specified, or named, on your policy.

If a driver is not listed on the policy and they cause an accident while driving your car, you will more than likely be subject to an additional excess, or you may not be covered.

Refer to your product disclosure statement (PDS) to better understand the exclusions, limitations, and excesses applicable in your policy.

This will depend on your insurer and what their rules are. But as a guide, you should have any regular drivers of your vehicle listed on your policy.

If you’re unsure, review your policy documents and ask your insurer who needs to be listed on your policy.

When you take out car insurance, you and your insurer can agree to a payout amount if your car ends up a total loss – that is, it’s written off or stolen and not recovered. This is an agreed value policy.

With a market value policy, the insurance company will pay you the car’s current market value in the case of a total loss. The insurer can work out the market value of the car based on its condition, odometer reading, make, model, and age, which generally determines the payout figure.

Agreed value policies are generally more expensive as they let you set the value of the vehicle for the policy period. But the benefit is, you can be certain about how much you’ll be paid out.

Market value policies can be cheaper to take out, as the value of the vehicle is determined at the time of a claim.

Yes, you’re legally allowed to drive someone else’s car in Australia with their permission. Goes without saying that the car you’re driving needs to be registered and have compulsory third-party (CTP) insurance (or a Green Slip, which is NSW’s version of CTP).

If the car’s owner has taken out third-party property damage or comprehensive cover, you’ll need to be listed as a driver on the policy. If you’re not a listed driver, the insurer can charge a higher excess or refuse cover for incidents while you were driving the car. That means your friend may have to pay their insurer extra or even go out-of-pocket for damages (at this point they may even be questioning your friendship!).

That said, a learner driver typically doesn’t need to be listed on someone’s car insurance policy until they’re on their Ps. Instead, there may be additional excesses in case of a claim – like a young driver excess. Always check the PDS, just to make sure.

Comprehensive car insurance provides the broadest range of cover. It can help cover repair or replacement costs for your car following an accident (even when you are at fault).

While it’s generally more expensive than third-party property and third-party fire and theft, it could help you save money if your car is written off and needs replacing.

It is important to remember that CTP and Comprehensive are two very different types of insurance.

Compulsory third-party (CTP) car insurance is compulsory and covers claims for injury or death caused by your driving. It does not provide cover for any damage to other people’s property, or your own. So, if you hit a Ferrari when you only have CTP insurance, you’ll likely be liable to pay for those damages out of your own pocket. Ouch!

Comprehensive car insurance does not cover injury or death, but it can help provide cover for damage to vehicles and property (either your own or someone else’s) within the limits and conditions of the policy.

Comprehensive car insurance is the highest level of car insurance cover. It can cover you for accidental damage to other people’s property and vehicles as well as damage to your own vehicle that’s caused by an accident, fire, or theft.

As with any insurance policy, there are exclusions with comprehensive car insurance.

Some are obvious, such as illegal driving activities, licensing status issues, or unregistered vehicles. Other exclusions may come as a surprise, like general wear and tear and breakdown, neither of which is generally covered.

Also, failing to disclose any modifications to your vehicle can result in claims being denied. You may consider checking for full exclusions with individual providers before you take out a policy.

Third-party property car insurance covers only the damage caused to other people’s vehicles and property, while comprehensive car insurance can help cover your own vehicle and belongings, even in the case of an at-fault claim.

Yes, it generally does. Comprehensive car insurance typically includes the coverage found in third-party property and third-party fire and theft policies, as well as additional events and benefits.

Depending on your insurer and level of cover, windscreen replacement can be covered in a comprehensive car insurance policy. Other insurers may offer it as an optional extra. However, even if your policy covers windscreens, you may need to pay a basic excess to repair or replace it. This can also count against your claims history, so be sure to check all your options.

If your car’s a write-off or it’s stolen and not recovered, a comprehensive car insurance policy could pay you out the current market value of your vehicle. If your car is insured for an agreed value, then you may be paid out the agreed amount. If your car is a total loss, you’ll be paid out market or agreed value minus any deductions listed on your product disclosure statement (PDS).

Third-party fire and theft covers accidental damage to other people’s property or vehicles if you’re involved in an at-fault incident. It also provides covers if your car is damaged by fire or if your car is stolen.

Third-party property covers accidental damage to other people’s property or vehicles if you’re involved in an at-fault incident.

However, it doesn’t cover your own vehicle or property. So if your car is stolen, involved in an accident, or damaged by a storm, any repairs or replacement costs will likely need to be covered by you personally.

Third-party property insurance covers claims for damage to other people’s vehicles or property in the event of an at-fault claim. CTP insurance only covers claims for personal injury or death.

If your car has been deemed a ‘repairable write-off’ you must declare it when you apply for insurance and some insurance companies may offer you cover. 

What fits the definition of a ‘repairable write-off’ varies between states, so you may want to look this up before you buy such a car. You will need to provide detailed reports of the damage and any repairs done. Plus, the insurer may request an independent assessment of the vehicle.

That depends. Many companies won’t offer comprehensive insurance if your car has existing hail damage, but will offer a lower level of coverage.

Your licence status and driving history are certainly a yardstick used by insurers to determine your risk level and whether they’ll provide you with cover. 

If you’ve previously had your licence suspended, your insurer will determine whether or not you’re insurable. Your premiums may be higher as a result of your suspension.

If your licence is currently suspended, some insurers may insure your car, but you will not be covered to drive it until your licence is reinstated. 

Some insurers may also ask that another driver with a valid licence be listed on the policy as the main driver. 

Ensure you read through the product disclosure statement (PDS) and discuss with your chosen insurer to understand how your driving history may impact your policy.

Ride-sharing services like Uber might offer personal injury support if you get into an accident while using your vehicle for ride-sharing. But if you want to protect your vehicle against any damages, you may want to consider keeping your own comprehensive car insurance policy in place.

That said, not all insurers may be willing to offer you cover if you use your car for ride-sharing.

Check with your state or territory’s road authority to better understand the requirements of using your vehicle for a ride-sharing service.

You must provide full details of any modifications and accessories to your insurer. Then, they’ll assess whether they are prepared to insure you. You may want to check your insurance options before buying a modified car.

You should check with your insurer about specific usage. But as long as you’re driving on a designated off-road track for personal or recreational purposes in a car made for off-roading, you may be covered under a comprehensive policy. Bear in mind, you may need to pay an excess for off-roading.

You may want to consider checking with your insurer to see if you’re covered for specific instances of off-road driving.

Yes, you can insure a classic car. Generally, insurers rate classic cars on age, condition, and usage. Getting your car insured as a classic varies, so it’s important to tell your insurer the full story.

Yes. Typically, only a comprehensive policy can cover an animal hit simply because it’s the only type of car insurance that covers damage to your car – and damage from an animal hit can result in anything from a cracked bumper to a total write-off.

A word to the wise – some insurers may consider any animal hit as an at-fault claim. The same could be said if you damage your vehicle while trying to avoid hitting an animal. These types of claims can impact your premium when you renew or switch policies.

Car insurance is priced according to the risk the insurer is taking on. Factors like your age, driving record, home address, and whether your car is parked in a garage or on the street can all affect the risk that the provider is taking and, therefore, the cost of your car insurance premiums.

When it comes to car insurance, you get what you pay for. A basic policy – like third-party property only – will be understandably cheaper than a comprehensive policy. Basically, the more a policy covers, the more it will cost. So, for example, third-party fire and theft generally costs more than third-party property, because it includes extra cover.

While price is understandably important, there are many things to consider. Consider what you definitely need cover for, and what you could go without to save you some cash. And keep in mind, a cheaper policy could end up costing you more when it comes time to make a claim.

It depends on the make and model of the car and exactly how old it is, because insurance premiums are assessed according to risk (among other factors).

While older cars could be less valuable than newer ones, they may also be less safe than their modern counterparts, or repairs may be more expensive because spare parts are harder to find.

What you pay for your car insurance can come down to your personal circumstances, such as your age and driving experience, where your car is parked, and your claims history. Big-picture factors like the increasing number of cars on the road, inflation, the frequency of weather events, and more can also seep into your premiums.

One thing you can be certain of is that a comprehensive policy is likely to cost more than your average third-party cover. For instance, in 2024, iSelect customers paid an average of $1,440.50 for their comprehensive car insurance. Within this group, the 18- to 24-year-olds paid the most for their cover at an average of $1,842, compared to $1,524 paid by those between 25 and 29 years.

Your personal circumstances can be a huge decider when it comes to car insurance costs. While things like your age and inflation may be out of your hands, here are some steps you can take to try and lower your car insurance premium:

• Look for discounts – You might be able to get a no-claim discount that can increase for every year you’re claim-free. Some insurers may also offer online discounts or multi-car discounts.
• Raise your excess – If you choose a higher excess, it means that you’re agreeing to pay more towards the cost of any claims you make. As a result, your insurer can reward you with lower premiums.
• Restrict younger drivers – Younger drivers are considered riskier to insure.For more information, see Victoria Police – Young drivers If you declare that there are no drivers under 25 on your policy, your premium might be reduced.
• Purge the extras you don’t need – Extras can be handy to have around, but really think them through. For example, if you don’t keep any contents in your car, why pay for personal effects?
• Keep your car safe – A car in a lock-up garage or with anti-theft devices installed is more likely to make a good case for a lower premium, given the lower risk of it being damaged or stolen.
• Choose a low-risk car – High-performance cars or those with a lot of modifications tend to attract higher premiums. Insurers can also consider the colour of your car!
• Compare policies regularly – Scope the market out yourself or use an online comparison tool. Comparing policies at least once a year can take you one step closer to finding better value car insurance.

When you take out a car insurance policy, it will probably have an ‘excess’. If you make a claim, an insurance excess is the amount you’ll have to pay towards the costs of the claim, and your insurer will make up the difference, subject to the limits of your policy. (Pssst: Read the product disclosure statement to find out how excesses work with your policy.)

The excess is typically applied on a per-claim basis, including storm, theft, and accidents. Typically, the only exemptions that exist for not paying an excess are when the driver is not at fault or when excess-free windscreen cover kicks in.

You may want to read your policy’s product disclosure statement (PDS) to know when you do and don’t need to pay an excess in the event of a claim.

When you take out a policy, you may be able to opt for a higher or lower excess. Usually, a lower excess will mean you’ll pay a higher premium.

You may want to check with your insurer if you want to change your excess. Some insurers may only allow changes to your excess when you renew your policy or during its cooling-off period and if you haven’t made a claim.

Yes, most policies will include a higher excess for younger and less experienced drivers. This often applies to those under 25 and those who have been fully licensed for less than two years, but it can vary between insurers.

Yes, although this can vary between insurers. Essentially, if an unlisted driver was driving the insured vehicle at the time of an accident, an additional excess is usually charged for the claim.

If the accident was your fault, then you will pay the excess on your policy. If you’re involved in a not-at-fault accident and your insurer is able to recoup the costs from the party at fault, you may not need to pay your excess.

When an excess is payable may vary from provider to provider, so you may want to consider checking your policy’s product disclosure statement (PDS).

Yes, generally the excess still applies if your car is stolen.

Yes, you will have to pay the excess that you agreed to when you took out the policy. Generally, only a comprehensive policy can cover hail damage.

The excess for a windscreen claim varies between insurers. Some insurers may offer you the option to reduce or waive the excess if you need to make a stand-alone windscreen claim. Usually, this adds to your premium.

Yes. Though it’s not your fault that your car got vandalised, you will have to pay the basic excess that you agreed to when you took out the policy.

If your car is deemed a write-off, then you will still have to pay an excess, unless your insurer determines that you were clearly not at fault.

Your current car insurer should have details about any previous claims that you have made, including the date and type of claim, as well as the payout and details of the incidents. 

You can get these details by contacting your insurer or by logging into your account on your insurer’s website.

Yes, some insurers will cover multiple cars under one policy, and you may get a discount if you take out multiple policies with the same insurer.

Most insurers will let you change your personal and payment details online, along with other things like excesses and optional extras on your policy. Changing other details may require a phone call.

Typically, this can be done online or via a phone call. If you move to a higher or lower risk area, you may find your premium changing accordingly.

If you’re not replacing your car, then you may need to cancel your policy from the date you sell your car. 

If you are replacing it, you can add it to your existing policy. But you’ll need to contact your insurer and update your policy details before you drive your new car away. Be aware that a different car can represent a different level of risk, and as a result, it could affect your premium.

Your address is an important part of the equation when your insurer is assessing the premium of your policy. If you don’t keep your details up to date, your insurance might not be valid when you need it.

Yes, but you must advise your insurer and be prepared for a change of premium if the car is in a higher or a lower risk category.

When your policy is due to run out, you’ll receive a renewal notice from your insurer advising you of the premium and when it’s due. Some insurers may automatically renew your policy unless you tell them otherwise.

Adding a learner driver to your policy can generally be done online or via a phone call. Bear in mind, they may attract an increased premium or a young/inexperienced driver excess.

These days, paying for your car insurance premium is a pretty easy process. You may be able to pay online, over the phone, or via direct debit.

If you let your car insurance lapse and you continue to drive, it’s important to remember that your vehicle won’t be insured. 

If you cause any damage to your own or other people’s vehicles or property, you’ll be paying the bill out of your own pocket.

Unfortunately, you can’t.

Car insurance is tied to the policyholder, not the car. If you’re selling your car, you’ll need to cancel your car insurance policy. The new owner will then need to take out car insurance of their own.

That said, you can transfer your existing policy to another car you own. You can expect to see a change in your premium if you’re transferring it to a different type of car.

Compulsory third-party (CTP) insurance, on the other hand, is usually tied to the vehicle’s registration and is automatically transferred to the new owner.

Not necessarily, but it’s generally preferred that you’re the registered owner of the vehicle you’re insuring. It’s best to check with your insurer whether you can insure someone else’s car and what’s involved.

With compulsory third-party (CTP) cover, the name on your car registration must match what’s on your CTP policy.

Regardless of who insures the car, the person who drives the car the most must be listed as the regular driver on the policy.

With most insurers, you’re covered from the moment you sign up for your policy. Bear in mind, some policies may come with waiting periods of, say, 72 hours before they can cover events like bushfires, storms, cyclones or floods.

If you want to be certain about waiting periods, look up your policy’s product disclosure statement for the specifics.

1. If anyone is injured and requires immediate medical attention, call 000 for an ambulance and police services.
2. Take the other driver’s name, address, car registration number and insurance details (if possible).
3. Take details of any witnesses to the accident.
4. Take pictures which explain the scene of the accident.
5. Contact your own insurer to report the incident as soon as you can and if appropriate, make a claim.

Making a car insurance claim is fairly straightforward, especially if you do it correctly. These things can help:

• Take pictures of the scene of the accident, road markings, signs etc.
• Contact your insurer as soon as possible with full details of the incident.

Your insurer should arrange to have the damage assessed and decide whether your car is to be written off or repaired.

Once your insurer has your claim, they have 10 business days to get back to you. If they need more information, their decision can take between four to 12 months, depending on the claim’s complexity.

Insurers consider all the information that is given to them by all parties involved. They take all this information and either accept or reject your claim based on the evidence provided to them.

Under the General Insurance Code of Practice, insurers must advise you whether your claim is accepted or denied, or whether they need more information, within 10 business days.

If you have comprehensive cover, your insurer may be able to cover costs to repair any damage to your vehicle. But if you can’t provide details of the hit-and-run driver, then your insurer may treat it as an at-fault claim.

If you’re able to track down the other driver, you may be able to recover the costs of any repairs from them. If they’re uninsured, you can still lodge a claim with your insurer, and they may be able to provide you with cover up to a certain amount.

A scenario like this can have many variables and just as many outcomes! The biggest decider could be who the driver at fault is, as they’re the ones going to be held accountable for the damages.

Whether you’re insured or not, if you didn’t cause the crash, the at-fault driver must pay compensation for your car’s repairs through their insurance – or go out-of-pocket if they’re uninsured.

A comprehensive policy typically covers damage to your car and any other cars involved in the accident regardless of who was driving it. If the driver is not listed on your policy, your insurer will simply consider it an event involving an additional driver, and you’ll have to pay an additional driver excess.

With third-party insurance, your car will not be covered for damage in an accident. But it can cover damage to the third party’s car if your car’s driver was at fault.

Make no mistake – because you’re the policyholder, you’ll be the one making the claims. This means it will add to your claims history, impacting your premiums and more.

When making a claim, you can ask your insurer to provide you with an estimate of repair costs. This can help you decide whether to pay out-of-pocket or not – that is, if the excess is higher than the cost of repairs. Why pay extra, while adding to your claims history in the bargain?

After you’ve made a claim, your insurer must get back to you within 10 business days to confirm if they’re accepting or rejecting your claim, or to ask you for more information. If your claim is rejected, your insurer must confirm it in writing.

Granted, things may not pan out the way you expect them, and you may be able to take it up with your insurer. If you’re still not satisfied with how your claim was handled, you can contact the Australian Financial Complaints Authority (AFCA).

Cancelling your car insurance can be a pretty straightforward process. Many insurers allow you to cancel your car insurance online or by phone. But before you cancel, consider having another policy ready to go if you’re still going to be driving your car!

As long as you’re up to date with your premium payments, you may not need to pay any cancellation fee – the same goes if you’re within your policy’s cooling-off period. Otherwise, some insurers may charge you an early cancellation fee. It’s best to read your policy’s product disclosure statement first, just to be sure.

Yes, sometimes.

If you cancel your policy within the cooling off period, then you may be entitled to a refund, as long as you haven’t made any claims in this period.

If you’ve paid for your car insurance premium in advance (such as an annual payment), and you choose to cancel your policy within the timeframe that’s already been paid for, your insurer may reimburse you for any payments you made ahead of the policy’s cancellation date.

If you don’t follow these guidelines, your insurer may issue you with a cancellation fee.