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What does car insurance cover?
Here’s a quick look at what your car insurance policy generally covers and what it doesn’t. Remember, every policy is different, so it’s important to check your product disclosure statement (PDS) to understand all the details. For answers to common questions about what is and isn’t covered, see the FAQs at the bottom of this page.
| CTP | Comprehensive | Third party property | Third party fire & theft | |
|---|---|---|---|---|
| Accidental damage to your car | X | ✓ | X | X |
| Natural events to your car | X | ✓ | X | X |
| Theft of your car | X | ✓ | X | ✓ |
| Vandalism to your car | X | ✓ | X | X |
| Damage to others’ property | X | ✓ | ✓ | ✓ |
| Injuries/death to others | ✓ | X | X | X |
| Roadside assistance | X | optional | optional | optional |
| Damage to personal property | X | ✓ (option to increase) | X | X |
| Hire car after accident | X | optional | optional (limited) | optional (limited) |
The car insurance excess, premium and claims
The car insurance excess
When your insurance company pays a claim according to your policy, you usually share a small portion of the costs. Your portion is called the excess. Here are some key points to remember about excesses.
- The excess amount. Most policies offer a range of excess amounts you can choose from. A higher excess means lower premiums since you’ll be paying more toward any claim…and vice versa. Most policies offer a range of about $500-$2000 for your standard excess, although you will find some that offer as low as $0 or as high as $5000.
- Additional excesses. The standard excess applies whenever you need to claim, regardless who is driving the car. But additional excesses can be stacked on top of this for things like unlisted drivers and young and/or inexperienced drivers.
The car insurance premium
The premium is how much your policy costs, paid either monthly or yearly – sometimes with a discount if you pay yearly. It’s calculated based on your level of cover, the excess and a whole host of behavioural like your age, gender, and postal code; situational factors like your driving and claims histories; and policy choices like your level of cover and choice of excess.
Car insurance claims
When you make a car insurance claim, you’re asking your insurer to cover the costs of an event your policy covers you for. The process usually involves letting your insurer know what happened, filling out their claim form and providing supporting documents like photos, receipts and/or police statements.
How much does car insurance cost in Australia?
Mozo has found that the average Aussie with comprehensive car insurance pays $1,640 per year, or about $137 per month.
Here’s a state-by-state breakdown:
| State | Average annual cost |
|---|---|
| TAS | $1,228 |
| ACT | $1,418 |
| SA | $1,418 |
| WA | $1,451 |
| QLD | $1,491 |
| NT | $1,794 |
| NSW | $1,842 |
| VIC | $2,070 |
*Based on more than 269,000 car insurance quotes Mozo collected in August 2025.
But the fact is, the cost of a car insurance policy can change significantly depending on your unique circumstances. For an exact price and specific cover, you’ll need to get quotes from a few insurers.
How to find cheap car insurance
Car insurance costs can vary, but there are several ways you could reduce your premiums:
- Compare at renewal. Don’t let your policy auto-renew without checking. Shopping around and comparing quotes from different insurers when your policy is due is one of the best ways to find a better deal.
- Online discounts. Many insurers offer a discount, sometimes significant, if you buy a new policy directly online.
- Bundle policies. You might get a multi-policy discount if you insure more than one car or combine your car insurance with other policies (like home insurance) from the same insurer.
- Increase your excess. Choosing a higher excess (the amount you pay upfront when you make a claim) will usually lower your regular premium. Just make sure you can afford the higher excess if you need to claim.
- Restrict drivers. Limiting who can drive your car (eg, only drivers over 25, or only named drivers) can often reduce your premium, as it lowers the risk for the insurer.
- Improve security. Parking your car in a secure garage, driveway, or installing approved security devices (like alarms or immobilisers) can sometimes lead to a discount.
- Pay annually. If you can, paying your premium for the full year upfront often works out cheaper than paying in monthly instalments.
- Drive less. Some insurers offer ‘low kilometre’ or ‘pay-as-you-drive’ policies that can save you money if you don’t drive long distances each year.
- Maintain a clean driving record. A history free of accidents and driving offences generally means lower premiums. A no-claims bonus is one example of this.
Need tailored information about your car insurance options?
Whether you’re a young driver, an older hand, have a classic car, or are going electric, we’ve got a guide for you. Here are some of our popular guides:
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