Third-party car insurance is the most basic optional form of insurance you can buy in Australia, as well as the cheapest. Known as third party property damage (TPPD), it offers drivers a budget-friendly way to cover themselves against damage their vehicle causes to other people’s cars or property.
What is third-party car insurance?
Of all the optional forms of cover available in Australia, TPPD insurance is the most limited in scope. It provides:
- Cover for damage to another party’s vehicle or property when you’re at fault. This includes liability cover, which can help financially if you’re taken to court after an accident (typically up to $20 million).
- Limited cover for your own vehicle if you’re not at fault and the other driver is uninsured, and you can provide their details. In this case, some insurers may pay up to a small amount (often $5,000).
Policies may also include:
- Cover for other drivers you allow to drive your car, though exclusions or extra excesses may apply.
- Temporary cover for a replacement vehicle.
Roadside assistance is sometimes available as an optional extra for an additional cost, but most add-ons – such as windscreen cover – aren’t usually offered with third-party policies.
For more protection, you may look to extend your cover with third party fire and theft (TPFT) insurance. This includes the same liability protection as basic third party, but also covers your car if it’s stolen or damaged by fire. Depending on the insurer, it may also come with limited extras, such as hire car cover after theft, towing after an incident or cover for items like car seats inside your vehicle.
Why compare car insurance policies through Savvy?
How much cheaper is third-party car insurance?
Third-party car insurance will almost always be cheaper than other levels of car insurance, as it offers a lower level of protection – especially when compared to the broader coverage offered by comprehensive car insurance policies.
To give you an idea of how much an annual TPPD policy might cost – and how the premiums compare to a comprehensive plan for the same car – we looked at quotes for ten-year-old versions of some of Australia’s most popular used cars:
| Vehicle | Car type | Fuel type | Transmission | TPPD | Comprehensive |
|---|---|---|---|---|---|
| 2015 Ford Ranger Wildtrak (4-door) | Ute | Diesel | Semi-automatic | $913 – $1,110 Average: $970 | $1,922 – $4,940 Average: $3,637 |
| 2015 Toyota RAV4 GX | Midsize SUV | Petrol | Automatic | $700 – $869 Average: $793 | $1,549 – $3,519 Average: $2,617 |
| 2015 Hyundai i30 Active | Small car | Petrol | Semi-automatic | $548 – $870 Average: $697 | $1,311 – $2,997 Average: $2,219 |
| All quotes were sourced from Compare the Market in June 2025. Based on a 30-year-old male driver in Adelaide with a full licence and no previous claims. The vehicle is used for private purposes, driven 15,000 km per year, and kept in a garage overnight. A standard excess of $600 applies. | |||||
As you can see, third party property damage cover can cost around one-third as much as comprehensive insurance – making it a more affordable option if you’re looking to save on your car insurance premiums.
Keep in mind that the premium you’re offered won’t just depend on your car – it’s also influenced by your personal circumstances, including your age, location, driving history and how the vehicle is used. For example, if the driver of the Hyundai i30 listed above reduced their annual kilometres to 5,000, their TPPD premiums could drop to between $476 and $748, with an average of $603.
How to get third-party car insurance
Getting third-party car insurance is quick and easy – especially when you compare your options online. Here’s how the process works:
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Fill out an online application
To get accurate quotes, you’ll need to provide our trusted comparison partner with a few basic details – including your age, location, driving history and car model. It only takes a few minutes and helps generate personalised quotes based on your profile and vehicle.
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Compare policies side by side
Once your quotes are ready, you’ll be able to see what each insurer is offering. Compare premiums, liability limits, exclusions and any included extras (like uninsured driver cover or temporary replacement vehicle benefits). You may also be able to take advantage of discounts or sign-up offers that can help lower your premium.
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Choose and purchase your third-party car insurance policy
Once you’ve found a policy that fits your needs and budget, you can buy online directly through the provider. In most cases, your cover will start immediately – so you’ll be protected as soon as you hit the road.
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Is third-party car insurance worth it?
Basic third-party car insurance can be a worthwhile and budget-friendly option – but only if you're comfortable with the level of risk it carries. It only covers damage you cause to other people’s vehicles and property, not your own, so if your car is stolen or written off in an at-fault accident, you’ll need to cover the cost of repairs or replacement yourself.
As a result, it’s most commonly used for older or lower-value vehicles that you could afford to pay for out of pocket. It’s also a popular choice for younger drivers or those on a tight budget, thanks to its lower premiums compared to comprehensive insurance.
However, third-party insurance might fall short if:
- You rely on your car for work or regular travel and would need a replacement vehicle straight away if something happened.
- Your car is still relatively new, high in value, or expensive to replace – such as electric vehicles, which can come with higher repair and replacement costs.
- You want cover for a range of damage and scenarios.
- You’d struggle financially to cover unexpected repair or replacement costs.
If this is the case, TPFT or comprehensive cover would offer more protection, and can save you money and stress in the long run if something goes wrong.
