Written by Third Party Fire and Theft insurance (also known as TPFT insurance) is one of three types of optional insurance available to Australian car owners. While it’s non-compulsory, taking out a vehicle insurance policy on top of your Compulsory Third Party (CTP) insurance can save you a significant amount of money if you find yourself in a sticky situation with your vehicle. TPFT insurance will cover the following types of damage:
- Damage sustained by another vehicle or property in an accident for which you’re liable
- Damage sustained by your car due to a fire
- Damage sustained by your car due to theft
- Loss of your car due to theft
It’s important to note that damage sustained by your vehicle in an accident you're at fault for isn’t covered under a TPFT insurance policy, nor will it cover you for any injuries or deaths caused by an at-fault accident. The latter of those is covered by Compulsory Third Party (CTP) insurance, which is mandatory for all vehicle owners to take out.
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Why should I choose Third Party Fire and Theft insurance over comprehensive car insurance for my vehicle?
The primary benefit TPFT insurance holds in this comparison is its price. Premiums for TPFT insurance policies, while not as cheap as Third Party Property Damage (TPPD) policies, are far less costly than those of comprehensive car insurance policies. Comprehensive car insurance is the most expensive when it comes to non-compulsory insurance options, which is thanks to its wide coverage across different types of damage. If you don’t have the financial capability to afford comprehensive car insurance, or if you simply don’t want to pay that much for your premiums while still retaining protection for your car, you might end up selecting a good TPFT insurance policy.
Another reason you might look to take out a TPFT policy is if your vehicle isn’t new anymore or has declined in value. Weighing up the options, it may not end up being worth the extra cost every year to insure your vehicle for accident damage. TPFT might strike the perfect balance of premium cost and coverage, as you’re not exactly getting short-changed when it comes to what you can be reimbursed for. Also, if the area you’re living in is more vulnerable to theft or bushfires, or don’t have a secure place to park your vehicle, you may reason that they’d be more likely reasons for your vehicle to end up being stolen or affected by fire. Let’s take the example below to see how you can save with a TPFT insurance policy:
You’re tossing up whether to take out a TPFT or comprehensive car insurance policy for your car. You’ve had it for a few years now, during which time you haven’t made any claims or been in any accidents, but it’s worth much less now than when you bought it new. You decide that the most important area of coverage for you is fire or theft damage, as you’re a safe driver with a spotless accident record but live on a property with no in-built parking facilities. Because your car isn’t worth a huge amount, you believe that if an accident did happen, you’d be more focused on the damage done to another car rather than your own.
You speak with an insurer who offers you a comprehensive car insurance policy valued at $90 per month. You then go to a different insurer for their TPFT insurance policy and find that they’re willing to offer $70 per month, which only omits coverage for damage to your car if you’re found liable for an accident when compared to the comprehensive car insurance policy. Laying out how much that might cost you, you find the following:
| Monthly cost | 12-month spend | Overall saving | |
|---|---|---|---|
|
TPFT policy |
$70 |
$840 |
$240 |
|
Comprehensive policy |
$90 |
$1,080 |
– |
*Calculations are based on estimates. Rates may not reflect current market offers for TPFT or comprehensive car insurance.
Under these conditions, you’d save $240 in just one year by choosing not to cover damage to your car in the event of an accident because you’re a safe driver. In scenarios like this, it might seem like a no-brainer to choose the TPFT policy, but it’s still worth considering the coverage and how much value you place on it.
Top tips on how to compare Third Party Fire and Theft insurance policies
The pros and cons of Third Party Fire and Theft insurance
Types of car insurance you can choose from
How to buy car insurance
Frequently asked TPFT insurance questions
Insurers tend to have their own repairers that they work with, so part of their cover is likely to be conditional on you going to their allocated repairer. However, many providers will offer a choice of repairer as a standard inclusion or optional extra on their policies.
There are pros and cons for both types, but if you’re getting a TPFT insurance policy because you’re not as concerned about a sizeable payout for your vehicle, you may wish to insure for market value. This will be calculated by the insurer at the time you make a claim and comes with lower premiums. Agreed value tends to provide greater insurance protection financially for your vehicle at the expense of higher fees.
No – TPFT only applies to your vehicle, not you. If you’re in an accident while driving another person’s vehicle, the cost incurred will depend on the insurance taken out on their vehicle rather than yours.
Yes – TPFT policies are open to other types of vehicles too, not just cars. You'll be able to find plenty of insurers that cater to your needs in this respect.
There are a few ways you can decrease your chances of having your vehicle stolen. Simple things like parking in a garage or carport (if you have access to one) and keeping your car keys around you most of the time will help keep your car that much safer. Also, never leave a spare pair of car and/or house keys in your car, as this will open you up further to the possibility of theft. Following these steps could help you reduce your premiums.
There are a number of factors that insurers will take into consideration when calculating the cost of your premiums. These are the most common and significant ones:
- Your age
- Your driving history (your history of accidents and/or claims)
- The type of vehicle you own (its make, model and age)
- Where you live
- Where your vehicle will be parked overnight (in a garage, driveway, on the street, etc.)
- How much you use your vehicle on a weekly, monthly or annual basis
- Any modifications you’ve made to your vehicle (anything from an added alarm system to a souped-up engine)
Probably not – you’ll only be able to make a claim if it’s damaged in an attempt to steal it. There are optional extras that you may be able to take out that could cover you if someone smashes your car windows, for example, but makes no attempt to steal it.
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Savvy’s comparison service includes selected products from a panel of trusted insurers and does not compare all products in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy. We always recommend readers to consult the Product Disclosure Statement (PDS) of different policies before purchasing your car insurance.
