A Comprehensive Guide to Australian Auto Insurance (Part One)

Auto insurance in Australia is a relatively simple affair when compared to other countries such as the United States. In the US, there is different legislation for each individual state. Some operate using the Tort system while others use the no-fault method. Auto insurance coverage across Australia is actually universal and road users only have three different types of policy to choose from.

Comprehensive Coverage

Comprehensive coverage in Australia differs to comprehensive coverage in the United States. In America, the addition of comprehensive coverage to a policy provides protection against non–accident damage to the vehicle of the policyholder. This can include situations such as flooding, fire, vandalism and acts of God. In Australia, a comprehensive policy provides blanket coverage and pays for the cost of repairs to a vehicle in both accident and non-accidents situations. Furthermore, comprehensive auto insurance also covers liabilities to third-party drivers and their property.

Third Party (Fire and Theft) Coverage

Third party (fire and theft) coverage will not cover the cost of accident repairs to the insured vehicle if the policyholder is at fault in a collision. However, the policy will cover any liabilities the policyholder may have to third-party drivers including payments for their injuries, repairs to their vehicles and the replacement of damaged property. Third party (fire and theft) coverage is cheaper than a comprehensive policy and represents the second-tier of the Australian auto insurance marketplace.

Third Party Coverage

Third-party auto insurance is the cheapest option available to Australian motorists. This is the absolute minimum level of auto insurance that a road user can carry. Although a third-party auto insurance policy will not cover any repair costs to the vehicle of policyholder whatsoever, it will cover all liability costs to third-party motorists and their property.