What is comprehensive car insurance?

A comprehensive car insurance policy is, as the name suggests, the most complete coverage you can get. 

Comprehensive car insurance will usually cover treatment for injuries to yourself and other drivers, damage to your vehicle, as well as other vehicles or property. Unlike Compulsory Third Party (CTP) insurance which simply covers injuries caused to others in an at-fault motor accident, it may also cover damage to your car from theft, vandalism, or other incidents.

However, any additional car insurance policy you take out will always add to your ongoing costs, with a comprehensive car insurance policy being the most expensive. This is why it’s so important to compare your options carefully to ensure you’re getting the best value option for your budget.

What does comprehensive car insurance cover?

Depending on the insurance company, the policy you choose as well as any extras, comprehensive car insurance will generally include coverage for:

• Non-Collision Damage: This is damage not caused by another vehicle, but instead includes damage from natural disasters like earthquakes, as well as damage from falling objects (e.g., trees or branches), vandalism, theft, fire, and more.
• Theft: If your vehicle is stolen, comprehensive insurance can help cover the cost of replacing it, or making necessary repairs if it's recovered with damage.
• Glass Coverage: Comprehensive coverage often includes coverage for damage to your vehicle's windows and windshield.
• Collisions: It typically covers damage resulting from collisions with animals, such as kangaroos or wombats.
• Natural disasters: Events like floods, hail or dust storms, as well as bushfires may be covered, but this can depend on the location of the vehicle. 

When comparing comprehensive car insurance policies, you may want to check if the insurer offers roadside assistance and coverage for any possessions that may be damaged or stolen along with the car.

Some comprehensive car insurance policies may also compensate you for getting your car towed, or the cost of travel after an accident. If you have nominated others to drive your car, they may also be covered in the event of an accident involving them.

Is comprehensive car insurance mandatory? 

In Australia, only CTP insurance is mandatory. However, many drivers still take out additional policies, whether that be a third party insurance policy or comprehensive car insurance.

You may choose to take out a comprehensive car insurance policy for the following reasons:

• You own a newer vehicle: Owners of new luxury vehicles may feel more encouraged to take out comprehensive car insurance, as the value of their car is typically much higher than the average, and therefore harder to replace out-of-pocket.
• You live in riskier areas: If you live in an area known for frequent storms or incidents like vandalism, purchasing a comprehensive car insurance policy may be helpful - particularly if only street parking is available.
• Your car loan requires it: Some car loan lenders may require you buy a comprehensive car insurance policy as part of their eligibility criteria for financing approval. 

How do you compare comprehensive car insurance quotes? 

To ensure you choose a comprehensive car insurance policy that suits your needs and budget, it’s worthwhile comparing a range of options. Here are key factors that you will need to compare when choosing a comprehensive car insurance policy:

Cost of premium

Your insurance premium refers to the regular payment you will be billed by your insurance provider. If you’re hoping to keep costs down, assess the premium cost from one insurer to another against your budget to make sure it is something you can afford. Keep in mind that monthly premium payments may seem easier, but it’s typically more affordable to pay an annual lump sum premium. 

Cost of excess

The excess will also play a significant role in your out-of-pocket costs when comparing insurance options. Having a clear understanding of your excess amount ensures you're prepared for any expenses that may arise in the event of an accident or damage to your vehicle. For example, if your excess is set at a high level, you might find it challenging to make a claim for minor incidents with relatively low repair costs, and you may need to cover these expenses yourself.  

Market value vs agreed value 

You’ll need to choose between insuring your vehicle at its market value or opting for an agreed sum in case of a total loss. 

The default choice for most is the market value insurance policy, in which your insurer will compensate you based on your car's estimated selling price at the time of the claim. This means the payout may fluctuate depending on market conditions, potentially creating uncertainty in the claims process.

Alternatively, an agreed value policy allows you to stipulate the exact amount you want your vehicle to be insured for. This option provides peace of mind, as you'll know precisely how much you'll receive from your insurer if the unfortunate need to file a claim arises.