Of all the optional forms of cover available in Australia, Third Party Property Damage (TPPD) insurance is the simplest in structure. There’s only one thing that TPPD insurance will usually cover: damage to another party’s vehicle or property for which you’re at fault. This extends to liability cover, which will give you a helping hand financially if you enter legal proceedings with another party due to an incident.
A major benefit arising from this fact is that TPPD insurance premiums are usually the cheapest on the market, with some costing as little as $20 per month. Compare a range of competitive policy offers online today through Savvy!
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Who might benefit from Third Party Property Damage insurance?
While it’s true that TPPD vehicle insurance isn’t for everyone, there are certain people and circumstances that may warrant consideration of this type of policy. Firstly, if you’re a low income-earner and can’t afford comprehensive car insurance, TPPD or Third Party Fire and Theft (TPFT) insurance are likely to contain more manageable premiums for you.
Also, if you own a car, motorcycle or other vehicle that’s not particularly valuable, a Third Party Property Damage insurance policy may be beneficial to you. Low-value vehicles tend to be easier to replace and pay for out of pocket, so you might prefer to do that than pay for coverage which may work out to be more expensive.
What will influence the cost of my Third Party Property Damage insurance premiums?
Your insurer will take into account several key factors when considering what rate your car insurance premiums will be charged at. If you can present yourself as a desirable customer in as many of these categories as possible, you could be offered extremely affordable premiums.
Your personal profile
Who you are as a person and a driver is very important to an insurance provider. The two major points of consideration will be your age and your driving history, while your gender will also factor into your premium calculations. Younger drivers typically aged 25 or under, or those with less experience, will almost always attract higher premiums, as they’re seen as being in the riskiest age bracket for accidents on the road. The older and more experienced you are, the better. Your driving history will also be a major consideration for insurance providers. If you’ve built up a history of at-fault accidents in the past, your insurer probably won’t have a great deal of confidence in you not continuing that trend. As a result, your premiums will be more expensive compared to those who have a relatively spotless crash record.
The make, model and age of your vehicle
Some vehicles are cheaper to insure than others. This may be because they’re more common or manufactured close to home, meaning that it’ll be cheaper for Third Party Property Damage insurance to replace car or other vehicle parts or conduct repairs. Additionally, your car’s safety relative to others will affect your premiums. If an ANCAP or UCSR safety rating indicates that your car is very safe and less prone to accidents, you’ll instil a bit more confidence in your insurer that you won’t have to make as many, if any, at-fault claims.
How much you use your vehicle
If you’re on the road more often, you’re more likely to be in an accident: it’s as simple as that. Those who are operating their vehicle frequently, whether for business purposes or simply commuting to and from work, you’ll be charged more for your insurance than others who cut down on their vehicle usage. This means that workers such as truck drivers, taxi drivers and rideshare vehicle drivers will almost always be paying a pretty penny for their car insurance. If you want to find ways to lower your vehicle usage, you could try catching public transport more often or walking, running or cycling to work instead of driving (if they’re feasible options).
Any modifications made to your vehicle
This can swing in both directions, as the nature of the modifications will make a difference to what you’ll end up paying for your premiums. If you’ve added features such as a more developed alarm system or additional lighting that add to the overall safety of your vehicle, insurers usually won’t have a problem. Where you might run into trouble is if you start modifying in areas like the engine to make your car more powerful, as these will either increase your premiums considerably or rule you out of mainstream insurance options. If this happens, there are other specialist insurers who can help you. Make sure you always let your insurer know before making any modifications.
Where you live
Even though TPPD insurance doesn’t cover damage to your car, insurance providers will still want to know more about where you’ll be keeping it. Some areas are known for greater accident risk, so an insurer will want to know whether you’ll be driving around in areas like these more often. For example, if your home is next to a massive intersection with a substantial history of vehicle crashes, your insurance premium is likely to set you back quite a bit more.
The pros and cons of third-party property damage insurance
Pros
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Affordable premiums
Of all car insurance, TPPD is almost always going to be the cheapest in terms of premiums that you’ll be able to get.
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Protects against big bills
A TPPD insurance policy could save you tens of thousands of dollars if you get particularly unlucky with an accident, an amount you would’ve been forced to pay out of pocket if you were relying solely on your CTP insurance policy.
Cons
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Limited coverage
TPPD insurance is by far the most restrictive, as it only covers damage to other vehicles or property.
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Less freedom with optional extras
You may find that the optional extras offered as part of your TPPD insurance policy are more limited than what you may find in a comprehensive car insurance policy.
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