Car insurance is an essential part of owning a vehicle for most Australians, with 83.6% of all drivers having been covered by comprehensive insurance for accidents in their car, according to a survey by Compare the Market.
However, there are more options than just comprehensive when it comes to insurance. There are cheaper alternatives available that fall under the umbrella of third party car insurance, but how are they different to comprehensive cover?
What’s the difference between comprehensive and third party car insurance?
The most basic difference between comprehensive and third party car insurance is that the former covers accident damage to your car, while the latter doesn’t. In reality, third party car insurance is a blanket term for three different types of cover:
- Compulsory third party (CTP) insurance: offers cover for liability in the event someone is injured or killed in an accident that you’re deemed responsible for. This insurance is mandatory for all drivers and registered vehicles in Australia.
- Third party property damage (TPPD): covers you for damage caused to other people’s property, such as their valuables or home, by you in your car. This is the cheapest, most basic type of optional car insurance available.
- Third party fire and theft (TPFT): covers you for damage to your vehicle in the event of a fire or if your car is stolen or broken into. These protections are on top of the TPPD coverage also included in this type of policy.
By contrast, comprehensive car insurance offers the most in the way of covered events and is the most expensive to purchase. You can see the differences in coverage for each type of policy here:
| Coverage | CTP | TPPD | TPFT | Comp. |
|---|---|---|---|---|
| Legal liability for injury or death to other people | ✓ | ✗ | ✗ | ✗ |
| Damage to another car due to an accident | ✗ | ✓ | ✓ | ✓ |
| Damage to or loss of your car due to fire | ✗ | ✗ | ✓ | ✓ |
| Damage to or loss of your car due to theft | ✗ | ✗ | ✓ | ✓ |
| Damage to or loss of personal items | ✗ | ✗ | ✓* | ✓ |
| Damage to or loss of your car due to an accident | ✗ | ✗ | ✗ | ✓ |
| Damage to or loss of your car due to a weather-related incident | ✗ | ✗ | ✗ | ✓ |
| * Benefit not available on all TPFT policies. | ||||
Comprehensive vs third party car insurance: cost comparison
As mentioned, comprehensive car insurance is the most expensive type of cover you can take out for your vehicle. Here are the average quotes for comprehensive and TPPD insurance in each capital city:
| City | Ave. comp. premium | Ave. TPPD premium |
|---|---|---|
| Sydney | $1,957 | $749 |
| Melbourne | $1,924 | $691 |
| Brisbane | $1,381 | $488 |
| Perth | $1,300 | $408 |
| Adelaide | $1,354 | $468 |
| Hobart | $1,248 | $405 |
| Canberra | $1,243 | $431 |
| Darwin | $1,613 | $469 |
| Car insurance quotes based on a 35-year-old male driver who obtained their licence at 17, has held comprehensive cover with no claims over the last five years, is employed full-time, is a homeowner, uses their car for private purposes and commuting only and drives approximately 12,000km per year. All comprehensive quotes are based on a $1,000 excess and TPPD quotes on a $600 or $700 excess. All cars are garaged, have no modifications or non-standard accessories and have an alarm installed. Quotes obtained through Compare the Market on 4 February 2026. | ||
As you can see, the difference between comprehensive and TPPD insurance adds up to as much as $1,000 or more in some cases. You’ll need to weigh up the benefits of expanded cover with the drawbacks of more significant spending when deciding whether to take out comprehensive car insurance.
Comprehensive vs third party car insurance: extras
TPPD is a slimmed-down product, so you’re unlikely to have much in the way of optional extras coverage. You may still be able to add roadside assistance to your policy, while some will also cover you if your car is damaged by an uninsured driver.
For TPFT insurance, you may also be able to add coverage for the cost of a hire car and lock and key replacements if your vehicle is stolen. In contrast, some of the additional extras that are available with comprehensive car insurance include:
- Glass/windscreen excess reduction: pay no excess if your windscreen or other glass in your car is smashed or cracked.
- Hire car cover: have the cost of a hire car covered if yours is unable to be driven for other covered reasons.
- Lifetime repair guarantee: all authorised repairs are guaranteed over the life of your vehicle and policy.
- New-for-old replacement: some policies will allow you to add coverage that enables you to have your current car replaced with a brand-new model if it’s written off within a certain timeframe.
- No-claim bonus protection: some insurers may allow you to keep your no-claim bonus even after you make a claim in return for an added fee.
- Choice of repairer: you can choose any repairer you like when your car is damaged, not just the ones your insurer would otherwise send you to.
The pros and cons of comprehensive car insurance
Pros
-
Wider selection of covered events
Comprehensive car insurance safeguards your vehicle and financial interests by covering a wide range of risks, from collisions to hailstorms.
-
Greater number of optional extras available
Most comprehensive policies offer extra benefits like new-for-old car replacement, choice of repairer and coverage for personal belongings inside the vehicle.
-
Peace of mind
You can drive confidently knowing that your vehicle is protected in various scenarios, whether it's an accident, a natural disaster or theft.
Cons
-
More expensive
Comprehensive insurance typically has higher premiums than third party insurance due to its broader coverage and added benefits.
-
May not feel worth it if you don’t make a claim
Some policyholders may find that they don’t need or use all the coverage offered by comprehensive insurance, making it less cost-effective for their specific needs.
The pros and cons of third party car insurance
Pros
-
Cheaper premiums
Third party car insurance is more affordable than comprehensive insurance, making it an attractive option for budget-conscious drivers.
-
May be more suitable for older cars
If you have an older, lower-value car that’s already on the way out, you might not need comprehensive insurance cover.
-
Offers valuable liability protection
Third party insurance provides essential liability coverage, protecting you from financial burdens in case you cause an accident that results in damage to someone else’s property or vehicle.
Cons
-
Less extensive coverage overall
Third party insurance offers minimal protection and doesn’t cover your own vehicle against accidents or, in the case of TPPD, theft or fire damage.
-
Leaves you without protection for your car
If your vehicle sustains damage due to an accident where you’re at fault, you’ll be responsible for your car’s repair or replacement costs.
Which is better: comprehensive or third party car insurance?
Ultimately, whether comprehensive or third party car insurance is better for you comes down to your individual situation. Your answer could very well be different to that of the next person. Here are some reasons why you might choose comprehensive car insurance:
- You own a new or expensive car that requires protection against a variety of risks, including accidents, theft and natural disasters.
- You want to ensure that your vehicle is covered in a wide range of situations, minimising out-of-pocket expenses.
- You’d like additional benefits like roadside assistance, new-for-old car replacement and coverage for personal belongings inside the vehicle.
- You’re financing your car for personal or business purposes and are required to have a comprehensive policy in place.
And here are some alternative reasons why TPPD or TPFT insurance may be more suitable for your situation:
- You’re on a tight budget and your vehicle is older or has a lower market value.
- You’re willing to bear the costs of repairing your own vehicle.
- You primarily want protection against damaging someone else’s property or vehicle in case of an accident.
