Vehicle Insurance in Australia

Find out about the types of vehicle insurance available in Australia, how to make a claim and what the cover provides...

In Australia all cars must be covered by compulsory third party (CTP) insurance. The term "green slip" is commonly used to describe the CTP insurance certificate.

CTP insurance provides cover if a driver is involved in an accident in which people are killed or injured. All states and territories require a car to have CTP insurance as part of the vehicle registration process. A foreign car can get compulsory third party insurance in Australia if it meets all the requirements for vehicle registration. The requirements and process for registering a car depend on the state or territory.

  • For details of CTP authorities in all states and territories: Click here

Types of Insurance

In addition to CTP insurance, there are several types of more comprehensive car insurance available. These include:

  • Third party property insurance: covers the policy holder's legal costs and damage to other cars
  • Third party, fire and theft insurance: covers damage to other cars and some cover to the policy holder's car should it be damaged by a fire or theft
  • Comprehensive insurance: covers damage to the policy holder's car and other cars if they are damaged in an accident, including a fire or theft

Third party policies offered by some companies include an uninsured motorist extension, which covers damage to the policy holder's car if it is damaged in an accident that was not their fault.

More comprehensive insurance can be difficult to arrange for a used car that has been imported into Australia.

Purchasing Car Insurance

Car insurance premiums vary, and there is a wide range in price for similar products offering the same level of cover. It is important to consider the balance between the premium paid and the excess, the amount of any claim made that the policy holder has to pay. The value of the excess is stated in the insurance policy. In general, the higher the premium paid, the lower the excess.

Car insurance policies in Australia are based on either the market or agreed value of a car. In an agreed value policy there is a set value in Australian dollars for the car. Market value policies value a car based on its condition, make and model. In most cases the agreed value is greater than the market value.

It is important to provide accurate information when applying for car insurance, as the insurer may refuse to make a payment if inaccurate information has been supplied. The insurer should always be informed if there are any changes made to the car or to the policy holder's circumstances, such as changing home address or using the car for business purposes.

Many insurance companies offer a no-claims bonus where premiums are reduced if no insurance claims have been made in the past. It is advisable to know what impact a claim has on this bonus before making one. Most insurance companies can transfer a no claims bonus from overseas to an Australian policy. Proof of no claims bonus from the previous insurer is required.

Accidents and Making a Claim

In the event of an accident, full insurance details should be collected from everybody involved so that as much detail as possible can be provided when the claim is made. The following information should be collected:

  • Names and addresses of all drivers involved in the accident
  • Insurance details of every driver involved
  • Names and contact details of anybody who witnessed the accident

It is advisable to note the time and date of the accident as well as the weather conditions. If possible the scene should be photographed or a sketch made. In more serious accidents a police report needs to be completed. This should be done honestly and as much detail as possible should be provided.

  • For full details of what to do in the event of an accident: Click here

Insurance claims are usually made by filling out a claim form. Many companies have telephone services and online facilities to facilitate this. The more information recorded when an accident happens, the easier it is to make a claim. To make a claim on another driver's insurance, a letter of demand should be written to them using the details they provide.

Cancelling Car Insurance

In general, car insurance can be cancelled after giving notice.  Check the required notice with the insurance company or on the contract. Insurance policies should be cancelled in writing, specifying the date on which the policy is to terminate. Under Australian law, insurance can be cancelled in the first 14 days after signing an insurance contract. This is known as the cooling-off period.

Some insurers may charge a cancellation fee. This is deducted from any refund due. There are no cancellation fees due if the policy is cancelled when the policy expires.