What Is Comprehensive Car Insurance?

When you buy a car whether brand new or second-hand, one of the most important decisions you’ll make is choosing the right insurance. Many drivers hear about comprehensive cover, but not everyone fully understands what it includes, how it works, and whether it’s the right choice.

What Is Comprehensive Car Insurance?

Comprehensive car insurance is the highest level of protection offered by most Australian insurers. Unlike basic cover such as Third Party Property Damage or Third Party Fire and Theft, comprehensive insurance protects your car, other people’s property, and your car against incidents like theft, accidents, vandalism, fire, natural disasters, or unknown damage.

Think of it as a full safety net for your vehicle. Whether you accidentally reverse into a post, someone keys your car in a shopping centre, or a storm causes serious damage, comprehensive insurance helps cover the repair or replacement costs.

It is not legally required in Australia, but it is the most recommended type of car insurance, especially for new or high-value vehicles.

What Comprehensive Insurance Covers

While each insurer may vary slightly, most comprehensive policies in Australia include the following major protections:

Accidental Damage (Your Fault or Not)

Whether you cause the collision or someone else does, comprehensive insurance typically covers repair or replacement. This includes:

• Major collisions

• Minor scrapes and dents

• Single-vehicle accidents (for example: skidding and hitting a barrier)

• Damage from hitting objects like poles, fences, or parked cars

This is the main reason people choose comprehensive cover, it protects your own vehicle even when you’re at fault.

Damage to Other People’s Property

Although third-party insurance also covers this, comprehensive insurance includes it as part of the policy. If you cause damage to someone else’s:

• Car

• House

• Fence

• Garage

• Shopfront

…your insurer will normally cover the cost. Liability limits are often high, usually up to $20 million, depending on the insurer.

Theft and Attempted Theft

Comprehensive insurance covers both successful and attempted theft. Claims may include:

• Stolen vehicle

• Broken locks from forced entry

• Stolen keys

• Damage caused by thieves

• Broken windows

Car theft is still a risk in many Australian suburbs, making this an important feature.

Fire Damage

Whether caused by arson, engine malfunction, or accidental fire, comprehensive cover helps pay for:

• Partial fire damage

• Full vehicle loss

• Smoke damage

Natural Disasters

Australia experiences harsh weather, and comprehensive insurance usually includes damage from:

• Hailstorms

• Floods

• Cyclones

• Storms

• Falling trees

• Bushfires

In a country with unpredictable weather, this protection alone can save you thousands.

Vandalism and Malicious Damage

This includes intentional damage such as:

• Key scratches

• Broken mirrors

• Smashed windows

• Spray paint

• Slashed tyres

If the cause is deliberate, your cover still applies.

Hit-and-Run or Unknown Damage

If you find your parked car damaged with no note left, comprehensive insurance generally covers the repairs.

Examples:

• Someone bumps your bumper in a carpark

• You wake up to a smashed mirror

• Unknown vehicle hits your parked car overnight

• 
  

Towing and Emergency Assistance

Most insurers offer towing to the nearest repairer after an accident. Some policies also include:

• Emergency accommodation

• Transportation after an accident

• Storage costs if the car is undrivable

What Comprehensive Insurance Does Not Cover

While it’s very broad, it’s not unlimited. Common exclusions in Australia include:

Mechanical breakdowns

Wear and tear isn’t covered.

Tyre punctures from normal use

Unless caused by a covered event (like vandalism).

Driving under the influence

If the driver is over the legal alcohol limit, insurers won’t pay claims.

Using the car illegally

Such as racing, unapproved modifications, or unlicensed driving.

Commercial use

If your policy doesn’t include rideshare or business use, claims may be denied.

Always check your Product Disclosure Statement (PDS) to avoid surprises.

The Difference Between Comprehensive and Other Types of Insurance

In Australia, there are four main types of car insurance:

CTP Insurance (Compulsory Third Party)

Required by law.

Covers injuries to people, not damage to cars or property. Known as a Green Slip in NSW.

Third Party Property Damage

Covers damage you cause to other people’s property only.

Third Party Fire and Theft

Covers:

• Damage you cause to other people

• Fire

• Theft

But still doesn’t cover accidental damage to your car.

Comprehensive Insurance

Covers everything listed above, your car, others’ property, natural events, theft, and more.

Who Should Get Comprehensive Car Insurance?

Comprehensive insurance is best suited for:

New car owners

Repairs on new vehicles can be costly.

Owners of financed or leased cars

Most lenders require comprehensive cover.

Drivers living in high-risk areas

High rates of theft, floods, storms, or dense traffic.

Anyone who relies heavily on their car

If your vehicle is essential for work, family, or travel, the financial protection is worth it.

People who park on the street

More risk of damage, theft, or vandalism.

Even owners of older vehicles sometimes choose comprehensive cover if repair costs would be difficult to manage out of pocket.

Optional Extras You Can Add

Australian insurers allow optional add-ons to customise your policy. Popular choices include:

Hire Car After an Accident

Provides a temporary replacement vehicle after an accident or theft.

Roadside Assistance

Covers breakdowns, flat tyres, battery issues, and towing.

Windscreen Excess Reduction

Reduces or removes excess for glass claims.

Choice of Repairer

Allows you to choose your own mechanic instead of the insurer’s.

New-for-Old Vehicle Replacement

If your car is written off within a certain age, you get a brand-new vehicle of the same make and model.

Personal Items Cover

Covers stolen or damaged items inside the car, such as bags or electronics.

Understanding Excess in Comprehensive Policies

When you make a claim, you’ll usually pay an excess, a contribution toward the repair cost. Types of excess in Australia include:

• Basic excess

• Age excess

• Inexperienced driver excess

• Special excess (for unusual risks)

• Additional voluntary excess

Higher excess = lower premiumLower excess = higher premium

Choosing the right excess level can reduce your yearly costs.

How Much Does Comprehensive Insurance Cost in Australia?

Premiums vary between drivers and vehicles, and are influenced by:

• Age and experience

• Driving record

• Vehicle model and value

• Suburb (risk level, theft rates)

• Parking location (street vs garage)

• Annual kilometres driven

• Optional extras chosen

On average, Australian drivers pay:

• $800 – $2000 per year for comprehensive cover

But high-end cars or younger drivers may pay more.

When Should You Consider Dropping Comprehensive Cover?

Comprehensive insurance may not be worth it if:

• Your car is very old or low in value

• Your premium is close to the car’s market value

• You rarely drive

• The excess is higher than likely repair costs

However, dropping it removes all protection for your own car.

How Claims Work

When an incident occurs, the basic claim process is:

1. Report the event to your insurer

2. Provide images and details

3. Submit a police report (if needed)

4. Wait for assessment

5. Car is repaired or written off

6. Pay your excess (if applicable)

Australia’s major insurers handle repairs through approved networks, often offering lifetime guarantees on workmanship.

Real-World Examples

Here are everyday situations showing how comprehensive insurance helps.

Example 1: Hailstorm Damage

A summer storm dents your roof and bonnet. Comprehensive cover pays for repairs.

Example 2: Reversing into a Pole

Your bumper is cracked. Your insurer covers it, minus your excess.

Example 3: Car Vandalised Overnight

Mirror smashed and paint scratched. Covered.

Example 4: Someone Hits Your Parked Car and Leaves

Comprehensive insurance steps in when the other driver isn’t identified.

Pros and Cons of Comprehensive Insurance

Pros

• Highest level of protection

• Covers your vehicle + others’ property

• Includes natural disasters

• Includes theft and vandalism

• Peace of mind

• Suitable for new and high-value cars

Cons

• More expensive than other policies

• Excess applies in many claims

• Not always necessary for old cars

Final Thoughts: Is Comprehensive Insurance Worth It?

For most Australian drivers, especially those with newer vehicles or living in high-risk areas, comprehensive insurance offers unmatched protection and peace of mind. While premiums may be higher, the financial safety it provides often outweighs the cost especially when accidents, storms, or theft occur.

Comprehensive insurance ensures that whether damage is your fault, another driver’s fault, or caused by weather or vandalism, your vehicle and finances are protected.

FAQ

1. Does comprehensive insurance cover everything?

It covers a wide range of incidents, but not mechanical breakdowns, wear and tear, or illegal-use situations. Always check the PDS for exclusions.

2. Do I need comprehensive cover for an old car?

It depends on the car’s value and your financial situation. If the repair cost is more than the car is worth, other cover types may be more practical.

3. Is comprehensive car insurance required by law in Australia?

No. Only CTP is required. Comprehensive is optional but highly recommended for valuable or regularly used vehicles.