Comprehensive Car Insurance in Australia: What It Covers, What It Costs & How to Choose [2026]
Original Published Date: July 16, 2023 | Last Update: April 9, 2026
Disclaimer: This article is for general informational purposes only and does not constitute financial or insurance advice. Insurance policies vary between providers — always read the Product Disclosure Statement (PDS) and any supplementary documents before purchasing. Consider whether the product is appropriate for your circumstances. Friendly Finance does not sell or broker insurance products.
Key Takeaways
Comprehensive car insurance covers non-collision events like fire, theft, and weather damage.
Premiums vary by age, state, vehicle type, and driver profile—EVs often cost more to insure.
Choosing a higher deductible lowers monthly premiums but increases out-of-pocket costs during claims.
Comprehensive car insurance is the highest level of vehicle protection you can buy in Australia. It covers damage to your own car whether from an accident, theft, storm, or vandalism, as well as damage you cause to other people's vehicles and property.
Yet despite being the most common type of optional car insurance, many drivers aren't entirely clear on what a comprehensive policy actually includes, what it doesn't, and whether it's the right choice for their situation.
What Is Comprehensive Car Insurance?
Comprehensive car insurance is a voluntary policy that protects your vehicle against a wide range of incidents. Unlike Compulsory Third Party (CTP) insurance which only covers injuries to other people and is included in your registration, comprehensive insurance covers physical damage to cars and property, including your own.
It sits at the top of Australia's car insurance hierarchy:
CTP (Compulsory Third Party): Mandatory. Covers injuries to other people only. Included in your vehicle registration. Does not cover any property damage.
Third Party Property Damage: Optional. Covers damage you cause to other people's vehicles and property. Does not cover your own car.
Third Party Fire & Theft: Optional. Same as above, plus covers your car if it's stolen or damaged by fire.
Comprehensive: Optional. Covers all of the above, plus damage to your own car from accidents, weather, vandalism, and more regardless of who is at fault.
If you're financing a vehicle through a car loan, most lenders will require you to hold comprehensive insurance for the duration of the loan. This protects both you and the lender's financial interest in the vehicle.
What Does Comprehensive Car Insurance Cover?
While exact inclusions vary between insurers, most comprehensive policies in Australia cover the following:
Standard Inclusions
Accidental damage. If your car is damaged in a collision, whether with another vehicle, a pole, a tree, or any other object, a comprehensive insurance covers the repair or replacement cost, even if the accident was your fault.
Theft and attempted theft. If your car is stolen, comprehensive insurance covers the cost of replacement up to the car's agreed or market value. Attempted theft damage (like broken locks or ignition damage) is also typically covered.
Storm and weather damage. Hailstorms, floods, cyclones, lightning strikes, and falling branches are all generally covered. Given Australia's climate, from tropical storms in Queensland to hailstorms in Sydney and Canberra, this is one of the most practically valuable inclusions.
Fire damage. Whether caused by an electrical fault, bushfire, or arson, fire damage to your vehicle is normally covered.
Vandalism and malicious damage. If someone keys your car, smashes a window, or otherwise deliberately damages it, comprehensive insurance typically covers the repairs.
Animal collisions. Hitting a kangaroo, wombat, or livestock on Australian roads is more common than many drivers realise. Comprehensive insurance usually covers this type of damage.
Third-party property damage. If you accidentally damage someone else's car, fence, building, or other property, your policy covers the cost — typically up to $20–$30 million per incident, depending on the insurer.
Common Additional Benefits
Many comprehensive policies also include:
Towing and storage after an insured incident
Emergency accommodation and transport if you're stranded more than 100km from home (typically up to $1,000–$1,500)
Personal items cover for belongings damaged or stolen with the car (usually up to $500–$1,000)
New-for-old replacement if your car is written off and was purchased new within the last 2–3 years
Windscreen and glass cover (sometimes excess-free for repairs)
Hire car following an accident that wasn't your fault (standard) or any insured event (optional extra)
Common Optional Extras (Additional Cost)
Roadside assistance — 24/7 breakdown help, flat batteries, flat tyres, lockouts
Hire car after any event — not just when the other driver is at fault
Excess-free windscreen replacement — removes the excess for windscreen-only claims
Choice of repairer — lets you choose any licensed repairer, rather than the insurer's network
Agreed value (vs market value) — locks in a pre-agreed payout amount if your car is written off
What Comprehensive Insurance Does NOT Cover
Understanding exclusions is just as important as knowing inclusions. Common exclusions across most Australian comprehensive policies include:
Mechanical and electrical breakdown. Wear and tear, engine failure, transmission problems, or electrical faults unrelated to an insured event aren't covered. That's what a warranty or mechanical breakdown insurance is for.
Tyre damage from road conditions. Flat tyres from potholes or road debris are typically excluded unless they occur as part of a larger insured incident (like a collision).
Driving under the influence. If you're involved in an accident while over the legal blood alcohol or drug limit, your claim will almost certainly be denied.
Unlicensed or unregistered driving. If the car is unregistered or the driver doesn't hold a valid licence for the vehicle type, the insurer can refuse the claim.
Intentional damage. Deliberate damage caused by you or someone acting with your knowledge isn't covered.
Using the car for purposes not disclosed. If you use your car for rideshare (Uber, DiDi), delivery driving, or business use without informing your insurer, claims may be denied. Always disclose how you use the vehicle.
Personal belongings beyond the sub-limit. Most policies cap personal items cover at $500–$1,000 and specifically exclude cash, mobile phones, and some electronics.
Pre-existing damage. Damage that existed before the policy started won't be covered. Insurers may request photos of your vehicle when you first take out the policy.
Important: Always read the Product Disclosure Statement (PDS) before purchasing a policy. The PDS is the legal document that sets out exactly what is and isn't covered, including all terms, conditions, limits, and exclusions. The Australian Securities and Investments Commission (ASIC) requires insurers to make this document available to you before purchase.
How Much Does Comprehensive Car Insurance Cost?
Premiums vary significantly depending on your circumstances. According to comparison data from Finder and Compare the Market, the average annual comprehensive car insurance premium in Australia ranges roughly from $800 to $2,500+, depending on factors like:
Your age. Younger drivers (under 25) pay significantly higher premiums due to statistical accident risk. Drivers aged 30–55 typically get the best rates.
Your car's value, make, and model. Higher-value cars cost more to insure. Sports cars and luxury vehicles attract higher premiums than standard sedans or hatchbacks.
Where you live. Urban areas with higher theft and accident rates (parts of Sydney, Melbourne, Brisbane) generally have higher premiums than regional areas.
Your driving history. A clean driving record with no claims earns better rates. At-fault claims or traffic offences push premiums up.
Your excess. Choosing a higher voluntary excess reduces your premium — but you'll pay more out of pocket if you make a claim.
How you use the car. Commuting daily incurs higher premiums than occasional weekend use. High annual kilometres also increase risk.
Security features. Garaged vehicles, cars with alarms or immobilisers, and those parked in secure car parks may qualify for lower premiums.
Ways to Reduce Your Premium
Increase your voluntary excess. Moving from $500 to $1,000 can noticeably reduce your annual premium — just make sure you can afford the excess if you need to claim.
Pay annually instead of monthly. Most insurers charge a fee for monthly instalments. Paying upfront typically saves $20–$50 per year.
Bundle policies. Some insurers offer multi-policy discounts if you hold home and car insurance together.
Limit named drivers. Restricting your policy to named drivers (rather than "any driver") can reduce premiums, especially if all named drivers are over 25.
Shop around at renewal. Premiums often increase at renewal. Comparing quotes from multiple insurers annually is one of the most effective ways to save.
Maintain a no-claims history. Many insurers offer a no-claim bonus (or "rating 1" protection) that rewards consecutive claim-free years with significant discounts.
Agreed Value vs Market Value: Which Should You Choose?
When you take out comprehensive insurance, most insurers ask you to choose between two valuation methods:
Agreed value means you and the insurer agree upfront on how much your car is worth. If it's written off or stolen, you'll receive that agreed amount (minus excess). This gives you certainty and is generally the better option for newer or higher-value cars.
Market value means the insurer will assess what your car is worth at the time of the claim — not when you took out the policy. Market values can depreciate faster than expected, and you may receive less than you anticipated. However, market value policies are typically cheaper.
⭐Tip: If your car is less than 5 years old or worth more than $15,000, agreed value is generally worth the slightly higher premium. For older, lower-value cars, market value may be sufficient.
When Is Comprehensive Insurance Worth It?
Comprehensive insurance makes financial sense when:
Your car is worth more than $5,000–$10,000. Below this threshold, the annual premium may represent a significant percentage of the car's value, making it less cost-effective.
You're still paying off a car loan. Most lenders require comprehensive insurance as a condition of the loan. If you're financing a vehicle through personal loans or a car loan, this is likely mandatory.
You couldn't afford to repair or replace your car out of pocket. If a $5,000+ repair bill would cause financial hardship, comprehensive insurance provides a safety net.
You live in a high-risk area. Areas prone to hail (Canberra, parts of Sydney, South East Queensland), theft, or frequent accidents benefit most from comprehensive cover.
You drive frequently or in high-traffic areas. More time on the road means more exposure to accidents, road debris, and other drivers' mistakes.
When It Might Not Be Worth It
Your car is old and low-value. If your car is worth less than $3,000–$5,000, the annual comprehensive premium might exceed what you'd receive in a total loss payout. Third party property damage insurance might be more cost-effective.
You have significant savings. If you could absorb a repair or replacement cost without financial strain, the decision becomes more about risk tolerance than necessity.
If you're weighing up whether to insure a lower-value vehicle, consider that even a minor at-fault accident where you damage someone else's property could cost $10,000–$50,000 in repairs. At minimum, third party property damage insurance is advisable for any car on the road.
How to Compare Comprehensive Car Insurance Policies
Not all policies are created equal. When comparing, focus on these key factors:
1. Check the PDS, not just the marketing. The Product Disclosure Statement is the legally binding document. Marketing pages highlight benefits; the PDS reveals limits and exclusions.
2. Compare the comparison rate, not just the premium. ASIC requires general insurance products to be presented fairly. Look at the total annual cost including any payment surcharges for monthly instalments.
3. Understand the excess structure. Your total excess may include a base excess, a voluntary excess (you choose), and additional excesses for young or inexperienced drivers. Add them all up to understand your true out-of-pocket cost per claim.
4. Check the claims process. Read reviews about how the insurer handles claims. A cheap policy is poor value if claims are consistently delayed or disputed. Trusted review sources include ProductReview.com.au and Canstar.
5. Look at included vs optional extras. Some insurers include hire car, roadside assist, or windscreen cover as standard; others charge extra. Compare the total package, not just the base price.
6. Check insurer financial strength. Stick with insurers backed by APRA-regulated entities. Major Australian insurers like IAG (NRMA, SGIC, SGIO), Suncorp (AAMI, GIO, Bingle), Allianz, and QBE all meet this standard.
Free comparison services like Compare the Market, iSelect, and Finder let you compare quotes from multiple insurers side by side.
Frequently Asked Questions
Is Comprehensive Car Insurance Compulsory In Australia?
No. The only compulsory vehicle insurance in Australia is CTP (Compulsory Third Party), which covers injuries to other people and is included in your registration. Comprehensive, third party property, and third party fire and theft are all optional. However, if you have a car loan, your lender will almost certainly require comprehensive insurance.
Does Comprehensive Insurance Cover Other Drivers?
Most policies cover any licensed driver who has your permission to drive the car. Some policies restrict this to named drivers only, or apply additional excess charges for drivers under 25. Check your PDS for the specific terms.
What Happens If My Car Is Written Off?
If your insurer determines that the cost of repairs exceeds the car's value (or a certain percentage of it), the car is declared a total loss. You'll receive a payout based on either the agreed value or market value of your car at the time, minus your excess.
Does Comprehensive Insurance Cover Me If I Use My Car For Uber or Food Delivery?
Standard comprehensive policies typically exclude rideshare and delivery use. You'll need to either notify your insurer and pay an additional premium, or take out a specific rideshare insurance policy. Driving for Uber, DiDi, or Menulog without proper cover could void your entire policy.
Can I Get Comprehensive Insurance With Bad Credit?
Car insurance applications in Australia don't typically involve a credit check. Your premium is based on driving risk factors, not your credit score. If you're paying monthly, some insurers may do a basic credit assessment for the instalment plan, but this is separate from the insurance approval itself.
How Do I Make A Claim?
Contact your insurer's claims line (usually available 24/7). You'll need to provide details of the incident, a police report number if applicable, photos of the damage, and the other driver's details if relevant. Most insurers now allow you to lodge claims through their mobile app.
Useful Resources
ASIC MoneySmart — Car Insurance — Independent government guidance on choosing car insurance
Compare the Market — Free comparison of comprehensive car insurance quotes
Finder — Comprehensive Car Insurance — Side-by-side comparison tool
Insurance Council of Australia — Industry body with consumer resources and disaster response information
Need help financing a car? Whether you're looking for a car loan or need a small loan to cover unexpected vehicle costs like registration, repairs, or insurance excess, Friendly Finance can connect you with trusted Australian lenders. Apply online in under 5 minutes →
