Third Party Car Insurance

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, updated on February 15th, 2024       

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Car Insurance Banner

When comparing car insurance quotes, it’s important to understand the types of third party cover and how they work. Depending on the policy you buy, this type of insurance covers you for damage you may cause to someone else's vehicle or property or damage to your own car from fire or theft.

You can compare a variety of quotes online right here. Simply fill out details about yourself, your car and the type of cover you need and you’ll be able to see instant live offers. So why wait? Get started today with a free, no-obligation quote for your third party car insurance today!

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

Third party car insurance is the most basic optional form of insurance you can buy in Australia. There are two main types of third party cover to compare when buying car insurance:

Third party property damage (TPPD)

TPPD insurance is a type of policy which can cover you for the damage you may cause to someone else's property with your vehicle. This could include damage to their car, home or any other property they may own and is often up to a certain limit, such as $20 million. This type of policy doesn’t cover damage to your own vehicle or any injuries you may sustain in an accident.

Third party fire and theft (TPFT)

On top of the cover offered by TPPD insurance, TPFT insurance is a type of insurance policy which can provide cover for damage to your car due to theft (or the theft of your car) and fire. This car insurance is a step up from TPPD in terms of coverage and price and may include other areas of cover, such as a rental car after theft and for personal effects in your vehicle (which may be optional extras).

How is third party car insurance different from other types of cover?

It’s important to understand how third party cover is different from the two other types of insurance available in Australia, as this may help inform your decision of what car insurance you need for your vehicle. All coverage in each of these types of insurance is subject to the terms and conditions set in place by your insurer. These are:

Third party insurance vs. compulsory third party (CTP) insurance

Although they both have third party in the name, these types of insurance are very different. TPPD and TPFT are optional forms of car insurance which can provide cover for damage to third party property or fire and theft damage to the insured vehicle.

On the other hand, compulsory third party (CTP) insurance is a mandatory form of insurance in Australia which can cover the cost of compensation for personal injuries caused by a car accident, regardless of who is at fault. CTP insurance is usually offered exclusively by insurers approved by state or territory governments or directly by a government body. It may also be included in the cost of your vehicle registration.

Third party insurance vs. comprehensive car insurance

As the name suggests, comprehensive car insurance offers greater coverage, primarily for your vehicle. On top of the cover offered by both types of third party insurance, you can also gain protection for damage to your vehicle in an accident or weather-related event (such as flooding or hail).

Comprehensive car insurance is the most expensive type of optional coverage, but it can also offer drivers the greatest level of peace of mind that they can be covered should a covered event take place, such as an accident or weather event.

Can I get cheap third party car insurance?

As mentioned, third party car insurance is cheaper than comprehensive cover (with TPPD typically being the cheapest car insurance with the fewest covered events). However, whether you’re able to purchase a cheap policy will depend on several factors, such as:

  • Your age: insurers will consider your age and experience when calculating your car insurance premium, with younger and less experienced drivers often attracting higher premiums
  • Usage: the more you drive, the higher your premium is likely to be. This is because the more time you spend on the road, the more likely you are to be involved in an accident.
  • Occupation: your occupation can affect your premium, as some jobs may be considered more high-risk than others. For example, delivery drivers or those who use their car frequently for work may have higher premiums.
  • Claims history: if you have a history of making claims, your premium may be higher. This is because insurers see you as more likely to make future claims.
  • Excess: the higher your excess, the less you’re likely to pay for your premium and vice versa.
  • Additional drivers: adding further drivers to your policy may increase your premium. Insurers consider the age and driving record of each driver when determining the premium.
  • Where you live: not every state, city, town or suburb comes with the same cost. Insurers will base their assessments on the level of risk they perceive in the area you live. For instance, those in the centre of Melbourne may not pay the same as someone in living in Victoria in the country.
  • Age and type of vehicle: the age of your car can affect your insurance premium. Older cars may have a lower premium, while newer cars may have a higher premium due to their higher value. However, if your car is considered a higher risk because of its old age, you may have to pay more. Meanwhile, the cheaper your car is to repair, the less you’re likely to pay for insurance.

It's important to compare car insurance policies based on their price (among other areas). By comparing online, you’ll be able to consider a variety of live quotes based on your profile and purchase your policy in minutes.

Types of car insurance you can choose from

Third party property damage (TPPD)

The most basic type of optional cover available, TPPD insurance can offer protection for damage caused by your vehicle to other people's property. However, no damage to your vehicle will be covered.

Third party fire and theft (TPFT)

A step up from TPPD, TPFT insurance can also cover damage to your vehicle sustained due to a fire or theft (or attempted theft) in addition to third-party property damage if you're in an at-fault accident.

Comprehensive

The most extensive (and expensive) form of cover, comprehensive car insurance can also offer cover for damage to your vehicle in an accident, collision and certain weather events on top of the areas TPFT covers.

Common questions about third party car insurance

What is a car insurance excess?

A car insurance excess is the amount of money you’ll need to pay towards a claim before your insurance coverage kicks in. For instance, if you caused $2,500 worth of covered damage and had a $500 excess, your insurance company would pay $2,000 after you paid $500 to them. This excess amount is agreed upon when you take out your policy and is typically higher for younger and less experienced drivers.

Can I add optional extras to my third party car insurance policy?

Yes – many insurance providers allow you to add optional extras to your third party car insurance policy, such as windscreen or roadside assistance coverage, for an additional fee. If you’re unsure about what can be added, you can speak with your insurer.

Will I be able to upgrade my third party car insurance policy later?

Yes – if you decide to increase your coverage, either by adding an extra or purchasing a new policy, you’ll be able to do so at any time. However, it's important to note that upgrading your policy may result in a higher premium, while cancelling your coverage to switch to another policy during your current policy’s term could incur cancellation fees. If you’ve paid your premiums in advance, you may be able to receive a pro-rata refund.

How do I make a third party car insurance claim?

To make a third party car insurance claim, you’ll typically need to contact your insurance provider as soon as possible after the incident occurs. You’ll need to provide relevant information about the accident, such as the date, time, location and details of any other drivers or witnesses involved. Each insurer will have their own process, so you may be able to do this online or over the phone.

Can vehicle accessories and modifications impact the cost of my car insurance?

Yes – the cost of your car insurance can be affected by any accessories or modifications that you have made to your vehicle. This is because these changes can increase the value of your car or make it more powerful, which in turn increases the risk of a claim being made and the cost of repairing it.

While you may not need to list them on your policy if they’re legal modifications or accessories, they’re relevant to disclose if you’re taking out market value insurance, as these will impact your insurer’s determination on your car’s value.

Does third party car insurance cover damage by an uninsured driver?

Third party car insurance can cover damage caused by an uninsured driver, but this will be subject to meeting certain criteria. For instance, this will generally only be for claims where you were 100% not at fault and rely on being able to supply your insurer with relevant information about the driver. This may only be up to a limited amount, such as $5,000.

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