What Is Third Party Car Insurance In Australia?

Students want to know about third-party car insurance in Australia, including why you need one and what they cover.

 

Having car insurance has become essential for Australians due to increasing road accidents to stay protected when driving on the road.

 

There are types, third-party property damage car insurance, compulsory third-party insurance, and comprehensive car insurance.

 

If you do not have car insurance yet and plan to buy one, you will find this blog helpful. Here you will learn about these insurance types, what they cover, the cost, ways to lower premiums, popular car insurers, and how to find the right insurance product for your needs.

 

 

1. What is a Third-Party Car Insurance?

 

Third-Party Car Insurance, also called Third Party Property Damage, covers the damage caused to someone else’s vehicle or property. By paying an additional premium, it can also protect against damage or loss of your car caused due to theft or fire.

 

Thus, by having this insurance, you can get money back for the repair cost of someone's else’s property or car, including the legal expenditure arising from an accident.

 

However, this insurance doesn’t cover the repair cost of your damaged car or pay for the expenses incurred to treat injuries you have caused to other people (if you are liable for the accident).

 

 

2. Types of Third-Party Car Insurance

 

Third-party policies are available in two types:

 

 

  • Third-Party Property Damage: Under this category, you are covered for any damage that you cause to someone else's property or vehicle. Your insurer will reimburse you for the repair costs of the damage you have done to someone else’s car.

 

  • Third-Party Fire & Theft: This type of 3rd-party car insurance covers you for third-party property damage and offers coverage to your car against fire and theft.  Due to both benefits, it is more expensive than a third-party property damage cover.

 

 

3. What Is Covered By The Third-Party Insurance?

 

Budget Direct is a leading provider of car insurance that covers your liability for a wide range of accidents caused to other people's property, including vehicles.

 

Let's find out about the third-party car insurance budget direct:

 


Benefits

Third-Party Property

Third-Party Fire and Theft
Basic Liability Cover (for damages incurred by another person on their property)
$20 million max

$20 million max

Legal costs

Covered

Covered

Damage caused due to an uninsured driver

$5,000 max (that includes towing, recovery, and storage costs)

$5,000 max (that includes towing, recovery, and storage costs)

Fire damage

Not covered

Yes

Theft

Not covered

Yes

Towing

Not covered

Yes

Hire a car after theft or attempted theft

Not covered

$5,000 max for up to 14 days if your vehicle isn’t found or while repair works are being done.

 

 

4. How Is The Third-Party Car Insurance Cost Calculated?

 

The following factors impact the price of a third-party car insurance policy:

 

  • The required level of cover 

  • Type of vehicle 

  • The brand and model of the vehicle 

  • The vehicle’s age

  • Your age

  • Your gender

  • Your driving record

  • Your address (state/territory where you live in) 

  • Any aftermarket upgrades

 

You can find free comparison websites online that provide quotes based on the above user details in just a few minutes.

 

The price of the premium depends on the following things: 

 

  • The possibility of the user claiming your policy

  • The chosen options

  • The overall cost of claims that the insurer will need to reimburse

  • Business expenses

  • Other commercial factors

 

 

5. How To Reduce The Third-Party Property Damage Insurance Cost?

 

You might get a slight reduction in your premium price. Some of these include:

 

  • Do not allow anyone below 25 years to drive your car

  • Go for a higher excess at a lower premium

  • Check the Product Disclosure Statement to find out available options for specific policies and providers

  • RACV third-party car insurance offers a 10% discount when you take out two or more eligible insurance products. Additionally, RACV members can save on their policy premium by choosing an annual payment. They also get e-gift cards and exciting discounts on attraction tickets or movie tickets by purchasing an RACV insurance policy online.

 

 

6. How Frequently Do I Need To Pay Car Insurance Premiums?

 

The third-party property damage car insurance only covers the cost of damage happening to the car or property of another person if you are responsible for that accident and the damage caused.

 

There are chances that the accident can cause significant damage to your car. As this insurance doesn’t pay for the damage costs of your car, it can be a huge expense and can take away your hard-earned savings.

 

That’s where comprehensive car insurance might be worth considering. This insurance covers your car against theft, fire, or accidental damage and gives you mental peace.

 

Hence, comprehensive car insurance offers the benefits of third-party damage and protects your vehicle against theft, fire, and other insured events.

 

In addition to the above, you also get a few other benefits that include:

 

  • Towing costs 

  • Roadside assistance

  • Belongings in the car

  • Urgent travel, repair, and accommodation costs

  • Replacement of an old car with a new one 

  • Replacement of the windscreen

  • Hire car costs

  • Legal liability cover

  • Replacement of lock and keys

 

For these added benefits and extensive coverage, comprehensive car insurance is more expensive than that third-party property insurance.

 

 

7. What is the Price Difference Between Comprehensive And Third-Party Car Insurance?

 

The below table compares the price of both policies offered by top car insurance providers in Australia.

 

 

Insurer

 Third-Party Insurance 

 Comprehensive Insurance


AAMI

$353.01

$723.17

Budget Direct 

$236.85

$725.64

Bingle

$266.37

$519.37

Coles

$234.02

$388.32

GIO

$360.58

$836.07

QBE

$335.97

$2,054.44

NRMA

$811.00

$1,315.68

 

 

8. What Is Compulsory Third-Party Car Insurance (CTP)?

 

This insurance is mandatory in all states of Australia. You can’t register a car without buying Compulsory third-party car insurance in NSW, also called Green Slip.

 

The insurance covers your accountability for injuries or death caused by you or other drivers of your four-wheeler to road users while using your car. It insures the claims for the losses and damage against you or your car driver for the injury he has caused to another person.

 

In most states, CTP insurance comes with your car registration. When you buy a CTP policy, the premium for this scheme goes to the insurer.

 

It is compulsory to buy the insurance separately before renewing your car registration. Service NSW provides an online or on-the-phone service to renew your car registration for six months.

 

If you are extending for six months, the CTP insurance has to be for the same duration of six months.

 

Check the regulations and requirements for CTP insurance in the states of Australia:

 

 

 

 

 

9. How To Get A Cheaper CTP Insurance?

 

The cost of CTP insurance depends on the state/territory where you live. There is a single CTP underwriter in some states in Australia, where the CTP premium comes with your registration.

 

You can find multiple CTP insurers in Queensland, Australian Capital Territory, South Australia, and New South Wales.

 

The best way to find the cheapest third-party car insurance in NSW is to get quotes from insurance companies and compare them.

 

The Green Slip calculator helps get the best price from all CTP insurers. Enter the vehicle and driver details correctly to get the best green slip price.

 

This calculator only works for the most common vehicles and not for heavy vehicles such as trucks, fleets, or buses. All the prices are from the State Insurance Regulatory Authority website.

 

Here are things that you need to enter into the calculator to get an estimated price of your compulsory third-party insurance:

 

 

Vehicle details:

 

  • Vehicle Type

  • Date of commencement of your vehicle registration

  • Vehicle manufacturing date

  • Postcode

  • Ownership: Individual or Company

  • Use: Business or Personal

  • Are you a GST-registered business?

  • The number of kilometres that your vehicle travels every year?

  • Do you have an existing green slip?

  • Do you hold any other vehicle insurance?

 

 

Owner’s details:

 

  • Owner’s age

  • Age of the youngest driver

  • Gender of the youngest driver

  • Number of demerits points lost by the driver/owner on their driving license

  • Have any of your car drivers met an accident due to their mistake in the past five years  

  • Have any of your drivers had license suspensions, limits, or debarments in the past three years

  • Do the drivers hold a valid NSW driving license?

  • Do any driver/s hold a provisional driving license?

  • How long has the least experienced driver held a driving license?

  • How many years has the car owner been an NRMA member or had NRMA insurance?

 

To get a better green slip price, you may need to wait until your driving record gets more reasonable. Click on the link for a detailed Compulsory Third Party Car Insurance Compare In NSW.

 

 

10. What Discounts Do You Get When You Buy A Green Slip?

 

After comparing the insurance cost, consider the discounts that insurers offer on their policies to decide on the best green slip insurance. There are currently six insurers: AAMI car insurance, Allianz, GIO, NRMA Insurance, QBE, and YOU that offer green slips to car owners in NSW. 

 

Only two insurers, NRMA and GIO, offer discounts on other vehicle insurance products to car owners who hold a CTP green slip with them. In the case of a “No Claim Discount” of a minimum of 60% on Comprehensive Insurance, GIO gives a flat discount of $50 on your Comprehensive Insurance.

 

Third-party car insurance NRMA gives loyalty discounts ranging from 5% to 12.5% on other insurance products if you buy green slips.

 

 

11. Third-Party Vs Comprehensive Car Insurance Vs CTP Insurance

 

A common question among car owners is how third-party property damage differs from compulsory third-party insurance. Here we have listed the key differences between both the policies.

 

  • Third-party property damage insurance only covers damage caused to the vehicle and property of another person. It doesn’t cover roadside assistance and damage due to theft, weather events, accidental damage, and vicious car damage to your vehicle. These benefits may be available with higher plans.

  • Comprehensive car insurance compensates for a broad range of damage caused due to an accident, fires, theft, and weather events (hail, storms, and cyclones.) It also covers you for damages to someone else’s property and car, offering a new car and windscreen replacement.

  • Compulsory Third Party Insurance (CTP) or Green Slip covers the legal liability of injuries caused to other people if you are at fault for a motor accident. It doesn’t cover the expenses incurred due to damage to your or others’ vehicle or property. 

 

Compulsory Third Party Insurance is mandatory for all registered cars in Australia. Any other vehicle insurance coverage you take out besides CTP is optional.

 

Some states give you the freedom to choose your CTP insurer, while others do not. In the case of Third-Party Property Damage insurance, you can compare and select the best provider from a range of insurance providers that suits your insurance needs regardless of your location in Australia.

 

 

12. What Happens To Third-Party Property Car Insurance If I Change My Car?

 

If the insurance owner wishes to sell his car, the cover benefits will directly pass on to your new car for up to 14 days.

 

 

13. How To Decide The Right Car Insurance?

 

The type of car insurance you choose depends on your needs. Here are a few things you must consider when buying car insurance:

 

  • Calculate your car value against the premium and excess amount of insurance. Based on this calculation, decide which car insurance will give you the best value and cover.

  • Consider the risks for which you want to get your car and drivers covered. Find out whether you need protection against car theft and fire. 

  • Whether you can afford the cost to repair someone else’s vehicle. If you can’t, you need some level of car insurance based on your situation. 

 

After getting an idea of what type of coverage you need, you should now understand the available third-party car insurances to find the right one. 

 

 

Third-party car insurance

 

Third-party car insurance provides less cover than comprehensive car insurance. It doesn’t cover your car against damage caused due to accidents, weather events and theft.

 

However, it covers the legal responsibility of your car’s driver if he causes damage to the property of other people while driving.

 

This insurance is ideal for those who need cheaper insurance, drive a less valuable or older car, or can not afford the repair costs if any damage happens to their vehicle.

 

 

Comprehensive car insurance

 

It offers third-party property damage benefits and compensates for accidental damage to your vehicle and driver for any damage while driving. This insurance is a good option for people with expensive cars who want better coverage and financial protection against damages to their and others’ vehicles. 

 

If you do not want to buy an expensive comprehensive cover, you can take an intermediate option. For example, third-party fire and theft insurance cost less than comprehensive car insurance provides. It will provide some protection for your vehicle. 

 

 

14. Conclusion

 

Car insurance is one of the best investments that gives mental peace to people knowing their finances will not take a hit even if their car meets an accident. The right car insurance will save you from potentially costly repair bills incurred due to car accidents.

 

However, to make the most out of your insurance, you should carefully assess your insurance needs so that you don’t pay more than you should. Reading product disclosure statements before buying car insurance will help you form an informed decision.

 

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