There are three (sort of, but we’ll get to that) main types of car insurance in Australia. Understanding what each cover and doesn’t cover can help you choose the right type of insurance for your needs.
Know your car insurance options
Comprehensive car insurance
Comprehensive car insurance is the broadest level of cover available. AAMI Comprehensive Car Insurance covers accidental loss or damage to your car by insured events such as collisions or weather events or theft.
It also covers damage to someone else’s car or property, up to $20 million, for which you might be liable.
What is covered by comprehensive car insurance?
AAMI Comprehensive Car Insurance includes cover for:
- accidental loss or damage to your car in an insured event (collision, hail, storm, flood, fire, theft and more)
- legal liability for damage to other people's car or property (up to $20 million)
- new car replacement if your car is a total loss within the first two years of registration – read the Product Disclosure Statement (PDS) for terms and conditions, and
- modifications and accessories that are permanently fitted to your car.
What isn’t covered by comprehensive car insurance?
With AAMI Comprehensive Car Insurance, you’re not covered for things such as:
- intentional or deliberate damage caused by you or anyone authorised to drive your car
- damage while the car is being driven unlicensed or in breach of licence conditions
- mechanical or electrical breakdown, and
- wear, tear and gradual deterioration.
This is just a summary. For terms conditions, limits and exclusion, read the PDS.
Third Party Property Damage Car insurance
Third Party Property Damage (TPPD) insurance covers your legal liability for damage your car causes to other people's vehicles or property. It doesn’t cover accidental loss or damage to your own car, except in limited scenarios such as damage by an uninsured driver.
AAMI Third Party Property Damage includes:
- up to $20 million for legal liability
- cover when towing a caravan or trailer, and
- up to $5,000 towards repairs if an uninsured driver hits your car (if you can provide their name, address and rego).
You can also add optional Fire & Theft cover for an extra premium — more on that below.
What is covered by Third Party Damage Car insurance?
- Legal liability for damage to other people's cars or property (up to $20 million).
- Legal liability when towing a caravan or trailer.
- Legal liability cover for a substitute car (when yours is being serviced or repaired).
- Up to $5,000 towards repairs if an uninsured at-fault driver causes loss or damage to your car (if you can provide their name, address and rego).
- Hire car after theft up to 21 days.
What isn’t covered by Third Party Damage Car insurance?
AAMI’s Third Party Damage Car Insurance doesn’t include cover for:
- Loss or damage to your vehicle outside of very specific scenarios, like damage to your vehicle by uninsured drivers. Very few exceptions apply, unless you’ve upgraded to Fire & Theft cover.
- Intentional or deliberate damage caused by you or anybody authorised by you to operate your car.
- Theft of your car (unless you add Fire & Theft cover).
This is just a summary. For terms conditions, limits and exclusion, read the PDS.
Fire, Theft and Third Party Property Damage
Fire & Theft Third Party is an optional upgrade to AAMI's Third Party Property Damage Car Insurance policy. For an additional premium, it provides cover for your car when loss or damage is due to fire, theft or attempted theft, while keeping your third-party liability cover in place.
What is covered by Fire, Theft and Third Party car insurance?
When you upgrade to AAMI’s Fire & Theft cover you’re covered for:
- everything included in Third Party Property Damage cover
- accidental loss or damage to your car caused by fire, theft or attempted theft
- hire car for up to 21 days if your car is stolen, and
- personal property up to $500 in an incident involving fire or theft.
What isn’t covered by Third Party Fire and Theft insurance?
Things that aren’t covered by AAMI’s Fire & Theft cover include:
- accidental damage to your own car (e.g. a collision)
- weather damage such as hail, storm or flood, and
- damage caused by someone driving your car without your permission (other than theft).
This is just a summary. For terms conditions, limits and exclusion, read the Product Disclosure Statement (PDS).
Compulsory Third Party (CTP) Insurance
CTP Insurance is mandatory for every registered vehicle in Australia, so it’s not considered car insurance. It can help cover costs related injuries sustained by people involved in a motor vehicle crash.
CTP is also known as a Green Slip in New South Wales (NSW) and Motor Accident Injuries (MAI) Insurance in the Australian Capital Territory (ACT).
The way CTP and MAI work varies by state and territory. In NSW, you must purchase it separately before you can register your vehicle.
In Queensland, South Australia and the ACT, you can choose your insurer and payment is made through your registration. If you're unsure what applies to you, check with your relevant state or territory authority.
What is covered by NSW CTP?
- Your liability for injuries caused to third parties in a motor vehicle accident.
- The liability of other people who drive your vehicle for injuries caused to third parties.
- Reasonable and necessary treatment and care expenses as well as lost income benefits.
- Caravans and trailers are usually included under the Green Slip of the towing vehicle.
What isn’t covered by NSW CTP?
- Damage to your vehicle.
- Damage to other people’s vehicles or property.
Do I need both CTP and Third Party Car insurance?
CTP is mandatory and covers injuries to other people but not damage to their vehicles or property.
Third Party Property Damage is optional but covers damage your car causes to other people's vehicles and property. So, if you cause an accident and only have CTP Insurance, you could still be personally liable for thousands of dollars in vehicle or property damage.
Can I drive another car with comprehensive car insurance?
AAMI Comprehensive Car Insurance covers your car as listed on the policy. It doesn't extend to other cars you might drive, unless they're specifically included.
However, AAMI does include legal liability cover for a substitute car if your own can't be driven (for example, while it's being serviced or repaired). This covers your legal liability for damage to other people's property while using the substitute car, but it doesn't cover damage to the substitute car itself.
If you regularly drive another car, your partner’s, for example, that vehicle should have its own insurance policy in place.
What happens if someone else crashes my car?
Under AAMI Car Comprehensive Car Insurance, you and anyone you authorise to drive your car are covered. However, conditions and exclusions apply.
If anyone drives your car repeatedly, they should be listed on your policy to avoid paying higher additional excesses in the event of a claim. An additional excess may apply if an unlisted driver:
- is involved in a claim and they're under 25 years of age, or
- have held their licence for less than two years (and are not a learner driver).
So while you can let someone borrow your car, it pays to know the policy rules before handing over the keys, especially if that person is young or relatively inexperienced. Check the relevant PDS for full details on driver conditions and excess amounts.
Do your own research before deciding what type of car insurance you need
The right type of car insurance really depends on your personal circumstances. Whatever level of cover you choose, always read the insurer’s PDS before you buy. This document sets out exactly what is and isn't covered, including any exclusions and conditions that apply.