Things you’ve always wanted to know about car insurance


Do I actually need it? What’s legal liability? An excess? Premiums? Wonder no more.

Some questions don’t have answers. These aren’t them.

Get detailed answers to the car insurance questions you were too scared or frankly uninterested to ask.

How does car insurance work?

Think of it like this. When you have an accident, there are two things that can happen. You can damage someone else’s things, or you can damage your own. With this in mind, you can divide car insurance into two different types of cover:

  • Liability cover: This is the type of cover that pays for your liability to others. What’s liability mean? That’s when you’re being held responsible for damaging other people’s property or paying them some kind of compensation if you injure them. So consider this: you lose focus for a moment and end up rear-ending another car. If you’ve got liability cover, then your insurer should cover the repair costs of their car.

  • Car damage insurance: This type of cover pays for repairs to your car or can reimburse you if it’s written off. So imagine you’re cruising along and another driver rear-ends your flashy car. Your insurers should pay the repair damage for you. Legends!

Generally, there are 4 different kinds of car insurance you’ll find in Australia, with different combinations of damage and liability cover.

  • CTP: This is liability insurance for serious injuries in road accidents. It’s mandatory and you need to have it in order to register a car.
  • Third party property car insurance: This is liability cover for damage to other people’s property.
  • Third party property with fire and theft: Third party liability cover as above, plus fire and theft car damage for your own vehicle.
  • Comprehensive car insurance: Liability cover as above, plus damage cover in a wide range of situations, such as hail, accidents, and everything else.

Only CTP insurance is mandatory, but you’d probably have to be crazy to drive without some extra cover.


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