Choosing the best car insurance for you

A buyer's guide to choosing car insurance

Finding the best car insurance for your needs doesn’t have to be time consuming or stressful. Once you understand the basics of car insurance, it’ll be much easier to make a decision. We’ve prepared a handy car insurance guide, so that you can compare car insurance policies and get covered.

What is car insurance and how does it work?

Car insurance is a product that involves an agreement between you and your insurer wherein you pay your insurer to cover you for some of the financial losses incurred when an insured event such as an accident, vehicle theft or vehicle damage happens. There are four main types of car insurance:

• Compulsory third party (CTP) insurance 
• Third party liability insurance 
• Fire, theft and third party liability insurance 
• Comprehensive insurance 

Each of these types of insurance offer different levels of cover.

How car insurance works

The way car insurance works is simple:

1. You compare car insurance policies and find a policy that suits your needs
   
   Car insurance policies (excluding CTP) have a Product Disclosure Statement (PDS) that outlines what the policy does and doesn’t cover. It’s important to read this and any Supplementary PDS (SPDS) and the Target Market Determination (TMD) before you decide. 
   
   
2. You pay the insurer for your policy
   
   This payment is called your ‘premium’. Your premium can be paid annually or monthly (there may be a cost difference between these payment options). When your insured period is ending and your next premium is due, you’ll be issued a renewal notice and you can decide if you want to continue with the insurance or look for a different cover.
   
   
3. Your insurer will give you a Certificate of Insurance
   
   This document, which can be mailed or emailed to you, is proof of your policy. It outlines your:
   
   • Selected cover
   • Sum insured
   • Optional benefits (if applicable)
   • Listed drivers
   • Excess
   
   Keep it safe because you’ll need it when you want to make a claim.
   
   
4. Claim within your insured period
   
   If your car is affected by an insured event (such as an accident) while you’re covered, tell your insurer. Your insurer will work with you to determine what you’re entitled to claim.

What do I need to read when researching car insurance?

Before you buy car insurance, it’s important to read the following policy documents:

Product Disclosure Statement (PDS): This document tells you what you are and are not covered for under a specific policy. It highlights things such as insured events, claim limits, exclusions, benefits and information on how the insurer's claims process works. It forms part of the issuing documents you receive when you purchase a policy.

Supplementary Product Disclosure Statement (SPDS): This document is used to advise you of any changes to the terms and conditions of the PDS. You must read this alongside the PDS.

Target Market Determination (TMD): This document explains who the specific insurance may be suitable for, as well as aspects of the policy which may make the insurance unsuitable for some customers.

Note: CTP policies don’t have a PDS, SPDS or Target Market Determination.

What is comprehensive car insurance and what does it cover?

Comprehensive car insurance can cover repairs to your vehicle and other people’s property or vehicles even when you’re at fault in an accident. Comprehensive car insurance may also cover your car if it is damaged by a fire or flood or if it is stolen.

Make sure you always read the Product Disclosure Statement (PDS), any applicable Supplementary PDS and Target Market Determinations before buying any car insurance policy.
 

What is third party liability car insurance and what does it cover?

Third party liability car insurance is cover for damage to a third party’s vehicle or property where you’re at fault in the accident. This type of insurance doesn’t cover any damages to your car unless the accident is caused by an uninsured third party driver.

What is fire, theft and third party liability car insurance and what does it cover?

You can also purchase fire, theft and third party liability car insurance, which covers damage caused by fire, theft or attempted theft and damage from an accident if it is caused by an uninsured third party.

What is compulsory third party (CTP) insurance and what does it cover?

CTP insurance is a type of mandatory insurance that covers the cost of compensation claims made by anyone involved in an accident who is not at fault.

It covers unlimited liability for personal injury caused by, through or in connection with the use of an insured motor vehicle in incidents to which the Motor Accident Insurance Act 1994 (MAI Act) applies.

CTP covers anyone affected by an accident that was not their fault that caused them significant mental or physical injury.

This type of insurance doesn’t cover:

• Damage caused to vehicles
• Property damage (signage, road infrastructure for example)
• Injuries to the at-fault person

In Queensland, CTP is paid when you register your vehicle or renew your vehicle’s registration, and it is illegal to drive a car that doesn’t have CTP cover.

What is the difference between comprehensive car insurance and third party liability car insurance?

The main difference between comprehensive car insurance and third party liability car insurance is that comprehensive car insurance offers cover for both your vehicle and any damage done to other cars and property. Third party liability car insurance, on the other hand, only offers cover for damage you cause to other cars and property involved, and will only cover your own car in very limited circumstances where an uninsured third party causes the accident.

Because it offers this extra cover, comprehensive car insurance will usually be more expensive than third party liability car insurance. To find out what a comprehensive or third party policy covers, check out its Product Disclosure Statement (PDS), any Supplementary PDS and the Target Market Determination.

What is the difference between CTP insurance and third party liability car insurance?

CTP is part of your vehicle registration and is paid every year or 6-month period. It does not cover property or vehicle damage. Third party liability car insurance is for the cost to repair any vehicles or property you hit and are liable for.

What does car insurance cover?

Asking what car insurance covers is a bit like asking, “How long is a piece of string?”. Not only do different types of car insurance policies cover different incidents, but the level of cover a specific type of policy offers will depend on who you’re buying the insurance from. The best way to see what a car insurance policy covers is to read the Product Disclosure Statement (PDS), any applicable Supplementary PDS and Target Market Determinations. Note: CTP policies don’t have a PDS, SPDS or Target Market Determination.

Does car insurance cover guest drivers?

Whether your car insurance policy will cover unlisted drivers depends on the insurer and policy you choose. Some insurers require you to list all drivers you want covered other insurers will cover any licensed driver. They may, however, still ask you to list all drivers.

It’s easy to list a partner, friend or family member on your policy. Simply call your insurer or check if you can update your policy online, and make sure you have the person’s driving and criminal history handy, as you’ll need to provide this information.

Does car insurance cover theft?

Whether your car insurance policy will cover theft or attempted theft of your vehicle depends on the type of policy you have.

Type of car insurance	Cover for theft or attempted theft
Comprehensive car insurance
Fire, theft and third party liability car insurance
Third party liability car insurance
Compulsory third party insurance

When it comes to protecting your vehicle from theft, it pays to read the Product Disclosure Statement (PDS), any applicable Supplementary PDS and Target Market Determinations. For example, comprehensive car insurance policies may offer policyholders a benefit that provides them with a hire car after a theft has occurred, some policies may exclude theft of personal property from a vehicle.

Does car insurance cover hail and storm damage?

Queensland is prone to severe weather events. No matter how prepared for storm season you are, when you compare car insurance it’s important to make sure your policy covers the unique risks in your area.

Usually, comprehensive car insurance can cover hail and storm damage, whereas third party liability car insurance typically won’t include this cover.

It’s a good idea to check your insurer’s definitions of hail and storm damage, as these may vary from insurer to insurer. You’ll find this and other useful information in the Product Disclosure Statement (PDS), any applicable Supplementary PDS and Target Market Determinations.

Does car insurance cover vandalism?

Whether your car insurance covers vandalism will depend on the type of cover you have and the circumstances surrounding the damage.

If you have fire, theft and third party liability insurance, you may be covered for damage that’s related to a theft or fire. For example, if a vandal sets your vehicle alight or damages it while attempting to steal it, you may be covered.

If you have comprehensive car insurance, you can be covered for acts of vandalism, depending on the circumstances surrounding the incident.

Check the Product Disclosure Statement (PDS), any applicable Supplementary PDS and Target Market Determinations for more information on what’s covered, what’s excluded, and any limitations that apply to the car insurance policy you’re considering.

What is excess in car insurance?

Your excess is the amount you pay towards each claim you make. Increasing your excess may help reduce the cost of your premiums. You may be able to nominate an excess that suits your individual needs:

• Increasing your excess will reduce your overall premium
• Decreasing your excess will increase your overall premium

Your Certificate of Insurance shows the types and amounts of excesses that may apply to your policy. More than one excess may apply to a single claim.

If you make a claim, your insurer will let you know:

• Which excesses apply and how much they are
• When and how to pay any excesses
• Who to pay any excesses to – you may be asked to pay an excess to your insurer or a third party like a repairer or supplier on their behalf

Compulsory Third Party (CTP) policies don’t require you to pay any excess.

How is car insurance excess calculated?

Unless you’ve purchased a ‘no excess’ insurance policy or you’re making a CTP claim, you should be prepared to pay at least a basic excess on any car insurance claim you make. How much your excess(es) will cost depends on several factors, including whether:

• You’ve lowered your excess and are paying higher premiums or vice versa
• A driver’s age or inexperienced excess applies
• An unlisted or listed driver(s) excess applies
• An additional excess applies
• You have an optional benefit that reduces your excess (an ‘Excess Free Windscreen’ benefit for example)
• You have comprehensive car insurance or a type of third party liability car insurance
• You or another driver is deemed at-fault in an accident

What car insurance do I need?

All cars registered in Queensland must have compulsory third party (CTP) insurance, which you purchase when you register your car or renew your registration.

Queensland’s CTP insurance scheme is regulated by the Motor Accident Insurance Commission (MAIC). To find out more about CTP or to calculate your CTP premium, visit the MAIC website.

As CTP insurance only covers not at-fault people who are injured in an accident and doesn’t cover vehicle or property damage, you may wish to purchase extra insurance.

When asking ‘What car insurance do I need?’ you should consider:

• The cost of car insurance: While it is tempting to buy car insurance solely based on the price of premiums, it’s important to think about the costs you may incur in an accident. If you have a low level of cover or a high excess, you’ll likely be more out of pocket at claim time.
  
  
• The value of your car: If your car isn’t worth very much and you could live without it after an accident, you may only need cover in limited circumstances. If you can’t live without your car or you can’t afford to foot a repair bill, comprehensive insurance might be a better option.
  
  
• Policy inclusions: Make sure your policy includes cover for events you want to be protected against. For example, if you live in an area with frequent hail, you might want to ensure you’ve got hail and storm cover included.
  
  
• Vehicle type: Not all insurers provide cover for all types of vehicles. For example, if you drive a unique vehicle, you may want to contact the insurer to explain your modifications and check if they will provide cover.

To find out more information on a car insurance policy, read the Product Disclosure Statement (PDS), any applicable Supplementary PDS and Target Market Determinations. Note: CTP policies don’t have a PDS, SPDS or Target Market Determination.

What is the best car insurance for young drivers?

When researching car insurance for young drivers, you’ll notice the options are the same as those available to older drivers. If you’re under 25, you’ll still have to purchase mandatory CTP insurance, and you can still get additional insurance like comprehensive or third party liability cover.

Younger drivers may, however, pay more for their car insurance regardless of the type of car insurance they buy. This is because they have less experience than other drivers on the road and statistically they are at a greater risk of having an accident than some other drivers.

An age excess may also apply to any claims made by younger drivers, unless they’re making a CTP claim.

Tips for younger drivers looking for the best car insurance for their needs include:

• Consider your car’s repair/replacement costs: If you drive a cheap car that will be inexpensive to replace or repair, third party liability insurance or fire, theft and third party liability cover may be a good option for you. If your repairs would cost more, you should consider whether a comprehensive policy may be more appropriate. 
• Don’t modify your car: You may find it difficult to insure a modified car, particularly if the modifications increase speed or require rare parts to repair, and policies that do cover modified cars are usually more expensive and attract higher excesses.
  
  
• List all drivers on your policy: If you have friends, housemates or relatives that frequently drive your car, you may need to let your insurer know, as many policies have excesses or exclusions for unlisted drivers.

How much does car insurance cost?

Because the cost of car insurance depends on many different factors, there's no average cost of car insurance. The good news is that many insurers will allow you to get a car insurance quote online so that you can compare car insurance costs before you buy.

Does age affect car insurance?

Your age affects both the cost of your car insurance premiums and the excesses that may apply to claims you make.

Premiums may be higher for younger, less experienced drivers who tend to have more incidents than older, more experienced drivers.

An age excess often applies if an incident happens and the driver of the vehicle is under 25 years old.

There are some circumstances where an age excess may not apply, or an unlisted driver age excess (which is more expensive) may apply. CTP claims do not require you to pay an excess. For more information about a comprehensive or third party liability car insurance policy, read the Product Disclosure Statement (PDS), any applicable Supplementary PDS and Target Market Determinations.

How are car insurance premiums calculated?

To calculate the cost of car insurance, your insurer will assess the likelihood of you making a claim according to various items of information about your policy which are called ‘premium rating factors’.

Some premium rating factors that insurers may consider when calculating your premium can include:

Your and other drivers’:

• Claims history
• Age and gender
• Driving history

Your vehicle’s:

• Accessories and modifications
• Address and location
• Purpose of use
• Sum insured amount
• Type of finance
• Type, make, model and year

Your policy choices:

• Nominated excess amount
• Optional benefits
• Premium payment frequency

Other factors that may affect the cost of your premium include:

• Applicable government statutory charges, levies, duties, GST and other taxes
• The cost of claims your insurer has paid or expects to pay in the future
• New data your insurer has collected on premium rating factors
• Changes to your insurer’s business running costs

To find out how a specific insurer calculates their premiums, refer the relevant PDS for the policy you're considering.

How much can I insure my car for?

Depending on the type of policy, you may be able to insure your car for an agreed value, or its market value.

Agreed value is the amount you and your insurer agree to insure your car for. This should be equal to what your car is actually worth, and it doesn’t account for the fact your car’s value can change over time (however, your insurer may suggest a new value at renewal). It’s important that you regularly check the replacement cost of your car, so that you know you’ve got enough cover. These policies are usually more expensive than market value policies.

Market value is the amount that your car is worth according to the value of similar cars in a similar condition to yours. If you insure your car for its market value, you can expect that the amount you get back if your car is written off may get lower as the value of your car usually depreciates over time.

Compare car insurance policies

What to look for when you compare car insurance policies

Comparing car insurance policies doesn’t have to be difficult, you just need to know what you’re looking for. Before you choose any policy, make sure you’ve looked into:

Cover: Decide whether you want comprehensive or a type of third party liability insurance, then compare the inclusions and exclusions listed in the applicable PDS and SPDS as you consider policies.

Cost: Compare the price of different insurance policies, making sure you go to the insurer’s website for your quote, as comparison websites can sometimes charge a markup or not show all available policies.

Reputation: Reviews and industry awards can help you see whether an insurer has a reputation for looking after its customers.  

Perks: Some insurers offer member benefits or rewards programs.

Roadside assistance: Comprehensive car insurance sometimes comes with roadside assistance included in the cost. However, it's important to make sure any included roadside comes with all the entitlements you need, as bundled roadside may not offer as much cover for services that a standalone roadside policy provides.

Flexibility: You may wish to pay your premiums monthly. Check which insurers offer this option at little to no extra cost.

Target Market Determination (TMD): This document explains who a specific insurance policy may be suitable for and highlights any parts of the policy that may make it not suitable for some customers.

What you need to compare car insurance quotes

Once you know exactly what you want in a policy, it’s time to compare pricing. To get an online car insurance quote, have the following information ready.

Your details:

• Contact details
• Driving history and licence type
• Any drivers you wish to list and their driving history
• Car finance details

Your car’s details:

• Make and model
• Registration number
• Modifications
• Approximate value
• Vehicle use (private or commercial)
• Average kilometres traveled*
• Parking location

*Some insurers restrict the number of kilometres you can travel, and going over your travel limit can impact your claim.

How do I switch car insurance providers?

Switching car insurance providers is easy.

Steps for switching provider

1. Check your Product Disclosure Statement (PDS) and any Supplementary PDS to see if there are any cancellation fees or premium refunds that you’ll get if you switch insurers before your renewal date.
2. Call your current insurer to cancel your policy. Tell them the date you’d like your car insurance to cease and ask if they need your intention to cancel in writing.
3. Compare car insurance and sign up for a new policy. Make sure your new cover will start before or on the day that your old policy ceases, so that you’re never unprotected.
4. If you’ve bought your car with a loan, check with your lender to see if they need a copy of your new Certificate of Insurance.

It’s easy to switch car insurance providers when your policy is due for renewal, as you can use the information you have about the price of your insurance and what you’re covered for to decide if you want to continue with your current provider or switch. If you start looking when you get your notice of renewal, you’ll also have time to shop around without having to worry about a gap in your coverage.

Steps for switching to a new CTP insurer

1. Compare CTP insurers. While the price of CTP in Queensland is the same regardless of which insurer you choose, some insurers offer extra benefits or it may be more convenient to have all of your insurance with one company.
2. Fill in the online form for switching CTP. You’ll need your driver licence and personal details of the registered owner or your Customer Reference Number (CRN) which can be found on your registration.
3. Wait out the remainder of your policy. Your CTP will be automatically transferred to your new insurer on your renewal date.
   
   

How often should I review my car insurance?

It pays to shop around when you’re looking for car insurance. But how often do you need to shop? A few events that can trigger a review of your car insurance include:

Changes to your circumstances: If you’ve bought a new car, you’ve moved house, or you want to list (or unlist) your kids or spouse as drivers or policyholders, you could benefit from reviewing your policy.

Changes to vehicle finance: If you’ve just paid off your car, you could benefit from a premium reduction.

Modifications to your car: While some modifications may make your car more expensive to insure (for instance, if the modification includes rare or expensive parts), accessories like car alarms can reduce your premiums.  

Changes to the market: Sometimes the value of cars can go up, especially if there’s a shortage. Make sure you have the right level of cover, particularly if you’ve got an agreed value policy.

Changes to your driving habits: If you're not using your car as much as you used to, or you want to start using it for a different purpose (business use for example) you'll need to reassess your insurance. 

Can I transfer car insurance to a new car?

If you’re buying a new car, the previous owner’s car insurance can’t be transferred to your name.

Assume that your new car is uninsured until you:

• Register it in your name (at which point you’ll get CTP cover) and
• Transfer your old car’s insurance to your new car (there may be a gap payment if there’s a difference in premium prices) or
• Buy a third party or comprehensive car insurance policy for your new car if it’s a first car or you don’t intend to sell your old car.

For more information, read the Product Disclosure Statement (PDS), any applicable Supplementary PDS and Target Market Determinations. Note: CTP policies don’t have a PDS, SPDS or Target Market Determination.

How can I check if my car is already insured?

You can check whether your car has CTP insurance by putting your licence plate number into the Queensland registration checker. This tool shows you when your registration expires, which is the same day that your CTP insurance will expire (you’re required to buy CTP whenever you renew your registration).

To find out whether you have other car insurance policies that are still valid, speak with your insurer or check your Certificate of Insurance.

Car insurance glossary

Risk: Risk is the chance that something harmful or damaging could happen.

Premium: A premium is the amount you pay for the cover your insurer provides you with under your policy. It includes any government statutory charges, levies, duties, GST, and other taxes that may apply.

Agreed value: The agreed value is the amount that your insurer agrees to insure your vehicle for. This amount is shown on your Certificate of Insurance. The agreed value includes all relevant statutory charges, GST and taxes.

Market value: The market value is the value of the vehicle at the time of the incident as determined by your insurer by checking against values of similar vehicles in your local market, taking into account the age and condition of your vehicle and the kilometres it has travelled. The market value does not include stamp duty, warranty costs, transfer fees, registration costs and charges, or dealer charges.

Claim: A formal notification to your insurer that you have suffered a loss or damage that you think is covered by your policy, and that you’d like them to assess the incident and compensate you for the loss or damage if it is covered.

Incident: An event which a person would not reasonably expect or intend that happens during the period of insurance.

Period of insurance: The period your insurer covers under your policy, which is shown on your Certificate of Insurance.