Most people prefer to travel around Australia by car to enjoy those beautiful tourist spots. But you never know what can happen when the possibility of an accident always exists, no matter how cautious you are behind the wheel.

So, instead of relying entirely on the wheels, prepare some paperwork in case an unfortunate event damages your car. These documents are known as car insurance policies.

A car insurance policy is required in Australia for these cases, and it can save you a lot of money by paying for car repairs and any people or assets you may have harmed or damaged with your car.

Types of Car Insurances in Australia 

In Australia, there are four main types of car insurance policies, each different and implied based on specific instances and forms of incidents. Here, we'll go over the differences between them so you can decide which one is preferred for you. 

CTP: Compulsory Third Party

The first one on this list is the most complex; it's called CTP, or Compulsory Third Party Insurance, and it protects other people from harm caused by accidents that you may be at fault for rather than your property or vehicle.

What Does It Cover?

It will only cover expenses related to other people's fatalities or injuries. So, it refers to anybody who is not you or does not have insurance coverage, including any potential drivers of other vehicles, someone driving the car you own, passengers, or bystanders. 

What exactly does it cover? Medical attention, rehabilitative services, financial difficulties, etc. Also, it doesn't insure the other car; only the person directly associated with it is covered, not any car damage. 

State-Wise Rule

This car insurance is in effect throughout much of Australia, is frequently referred to as a "green slip" in NSW, and is mostly handled by the state where you live. Among the states, Queensland, SA, and WA have an at-fault rule. 

If the driver is at fault, they cannot make a CTP compensation claim. For instance, if the driver's bad behaviour, such as a drinking issue, caused the accident, he won't receive any insurance benefits. However, the CTP can be granted based on the severity of the injury and the degree to which the accident was fatal.

What if the Accident Happened on the Interstate?

Accidents can happen while travelling through other states; in these cases, the CTP will be implemented based on where the accident occurred. Furthermore, if your vehicle is registered in another state, the claim will be made against the CTP insurer or the other driver.

Comprehensive Car Insurance

The next is the most expensive car insurance; the comprehensive car insurance policy. It provides the highest protection level and helps keep your costs as low as possible. But, if you caused the accident, this insurance would cover the people or properties you harmed and any damage you caused to yourself.

The only difference between this and CTP is that you and your vehicle will be equally covered for any damage you unintentionally cause to other people's stuff.

What It Has to Offer?

Everyone who owns a four-wheel vehicle is covered by comprehensive insurance. For example, if the driver has never been insured, he will not be covered. Furthermore, if you were involved in an accident due to excessive drinking or drug use, you have no recourse! Also, insurance options can differ, so checking ahead is a perfect time.

The insurance policy will offer numerous options, including market and agreed value. These two are generally the amounts fixed for car insurance and determine how you'll get them if something happens to your car, such as being robbed.

For the agreed value, the insurance is provided in a specific manner in which the insurer determines the amount, and you agree to it. Your insurer will pay you the full value if you lose your car. 

If you have a loan on your car, you should think about getting insurance for an agreed value that is at least the sum of the finance you took. This way, even if you lose your car, the debt will be compensated before you get a new ride.

Market Value

The value of your car at the moment of the accident determines the market value. It can greatly reduce your premium, but the value may vary depending on the event. As nothing is predetermined, you will be less clear about the payout.

It may be less expensive than the agreed price value, but it is less reliable.

TPP: Third-Party Property

Third-party property insurance, or TPP, is regarded as the absolute perfection of the four types of insurance. It covers you after you've damaged another car. Still, there can also be some limited insurance for you from the other driver who is uninsured but only in certain circumstances.

It primarily covers the other person you injured, his property, and his car. As we saw with CTP, it only covered serious harm to the other individual, and neither of your vehicles or private properties was insured. 

The sole exception is that with TPP, as opposed to CTP, the injured party and the car or other damaged property are covered.

Third Party: Fire & Theft

The final one, which we call the TPF&T, is similar to TPP in that it covers unintentional damage to other people's property or vehicles caused by your conduct. Here are some more, though; it offers coverage if your car is hijacked, destroyed intentionally, or suffers fire damage.

Plus, in this case, you can either choose the market value alternative or an agreed value, where the insurance will be fixed in advance under theft and fire damage, depending on the type of policy you had insured.

What Will Be Your Choice?

Finally, we must consider which option will work perfectly for you. Following a thorough investigation, the Comprehensive policy appears to be adequate because it will cover both you, your car, and the cracked ones, too, even if the blame is yours to take. We don't want to be caught without insurance, so get something that isn't too heavy on you. There's more to consider here, but the final call will be yours, depending on the circumstances.

Car Insurance: A Smart Decision

Given how these four types of auto insurance operate, it is clear how important it is for you to have car insurance. The ability to assess premiums, eliminate excess payments, and receive substantial financial benefits in times of emergency is facilitated by car insurance. Whatever perfect meets your requirements and situation is always available for you to reach here.

So set aside some time for yourself and look for the perfect deal!