Most people forget or aren’t aware of just how big Australia is. You may also not realise that public transportation options aren’t always available outside the capital cities. So if you’re planning to do some long-term backpacking and want to explore more than just the cities, you might want to get a car. Having a car will give you the freedom to go wherever you want, whenever you want, but it also comes with some responsibilities.
Australia has six states and two territories, each governed by its own rules for cars, driving, safety, registration and insurance. The two biggest costs, outside of actually buying the car, will be registration (or rego) and insurance.
It’s a requirement to have compulsory third-party (CTP) insurance before you can register a vehicle in Australia. In some states or territories, this insurance is included in the rego fees, while other states require you to purchase it separately.
As a backpacker, you’ll most likely be purchasing a second-hand car. This will mean you’ll need to get rego transferred into your name and transfer or buy a CTP policy for the car.
CTP insurance is the minimum insurance required by law in Australia and is mandatory before registering a vehicle. CTP covers any expenses related to medical treatment, rehabilitation, and other care services to other drivers and passengers injured in accidents where you’re deemed at fault.
However, it doesn’t cover any expenses related to your own treatment if you’re also injured in the accident. Additionally, CTP doesn’t cover any damage caused to your vehicle or other vehicles.
When you buy a car, you’re not required to get more car insurance other than CTP insurance. However, you may consider obtaining additional cover just in case your vehicle is damaged in an accident.
If this happens, you’ll not only be paying to repair your car but also any other vehicles involved as well. Any additional cover will come at an extra cost, so you’ll have to ensure it’s within your budget. Additional car insurance in Australia for backpackers includes:
Third-party property insurance covers accidental damage to third-party vehicles or property but doesn’t cover any damages to your vehicle.
This type of insurance covers everything that's covered in third-party property insurance, as well as any loss if your car is stolen or damaged in a fire.
Comprehensive insurance is the highest level of car insurance coverage you can get in Australia. It covers everything the other policies cover but also includes cover for your property.
Comprehensive car insurance also covers accidental damage or damage caused by natural disasters. Any belongings inside the car are covered, and you can typically get your car keys replaced with comprehensive car insurance.
You may also qualify for a replacement hire car if your car is being repaired after an accident, as well as other insurance features.
This additional cover may be beneficial when driving as a backpacker across Australia, since you’re unlikely to have financial or physical support available to help cover unforeseen costs. Comprehensive car insurance comes at a higher cost, so this should be factored into your decision-making process.
Since you may be planning on driving your car around quite a lot as you see the country, here are some things you might want to consider covering as part of your insurance policy:
Considering it’s likely that you’ll be driving a used car including breakdown cover or roadside assistance could be helpful as used cars are more prone to engine issues. Another feature that will be useful to have for your used car is emergency repair cover to help you in an emergency.
Australian weather is unpredictable, and things like hail, flooding, or storms can cause damage to a car that can cost a lot to repair. Ensuring you have backpackers' car insurance that includes cover for these sorts of events will help save you money if unexpected weather occurs. Be sure to read the insurance product disclosure statement (PDS) carefully, as some policies may cover specific events but not others.
You’ll likely keep some of your belongings inside the car while travelling across Australia. Getting replacement coverage for expensive items like phones, laptops, passports, and other items may be a wise decision.
You never know what you’ll encounter on the roads in Australia. From kangaroos to wombats to feral dogs - they can all do damage to your car if you hit them. Hitting a kangaroo, in particular, is quite common and can cause severe damage to your car, and repairs may become expensive. Opting for coverage that includes if you hit an animal can help you save money.
There are multiple ways to find the most affordable car insurance for backpackers, but here are a few tips to help:
Taking out backpacker car insurance is relatively simple. You’ll just need a few things to help you acquire a policy:
Before taking out car insurance for backpackers in Australia, ensure you understand all the policy details and compare policies to find the most affordable and appropriate option.
This article was reviewed by Peter Terlato before it was published as part of RateCity's Fact Check process.
