Comprehensive versus Third Party Fire and Theft

In Australia, there are four main types of car insurance:

• Compulsory Third Party (CTP)
• Third Party Property Damage
• Third Party Fire and Theft
• Comprehensive.

While CTP (also referred to as Green Slip in NSW and MAI in the ACT) is mandatory for all Australian drivers, the rest are optional — but often taken up — because they can help protect against certain costs and liabilities when things go wrong.  

The important thing to keep in mind, is that there’s no “best” or “worst” among them. They all serve their own purpose and provide their own unique benefits.

OK, now we know the basics, let’s dive in to why you’re here!

Third Party Fire and Theft Car Insurance can be hard to wrap your head around. Put simply, it can help cover:

• your car if it is damaged by a fire or stolen
• damage your car causes to other people’s cars and property.

It’s important to note that with this policy, if you’re at fault in an incident, damage to your own car won’t be covered. However, if an uninsured driver causes damage to your car (and you’re not at fault), you may be covered up to a certain limit depending on the insurer.  

This level of cover is usually a ‘market value’ agreement. This means that in the event of your car being deemed a total loss (written off), the amount you’ll be paid out after a successful insurance claim would be based on what similar cars are selling for on the market, rather than an amount you choose. However, at NRMA Insurance, we provide the option of choosing market or agreed value (up to a specified limit).

Comprehensive Car Insurance provides a more extensive level of cover, hence the name. In addition to protection for theft, fire and damage your car might cause to other people’s cars and property, it may also cover (depending on your insurer):

• damage other motor vehicles cause to your car 
• storm, flood and hail damage
• loss or damage to belongings you keep in your car. 

Plus other extras, depending on the type of comprehensive policy you choose:

• new vehicle replacement after a total loss claim
• hire car after an accident or theft
• excess-free glass repair or replacement.

When it comes to comprehensive car insurance, some insurers will allow you the option to choose between agreed and market value for your car (such as our Comprehensive  and Comprehensive Plus policies). In the case of an agreed value policy, you’re allowed to set the exact amount (within reason) you’d be paid out after an accepted total loss claim, rather than have it be assessed against the market.

Deciding which level of cover is right for you will all depend on your individual needs and circumstances. Here are some things you might like to consider when weighing up your options:

• the age and condition of your car
• your budget and what you can afford
• how you store your car and how often you drive it
• what it would cost to repair or replace your vehicle if it was damaged or destroyed.

As you weigh up the price, be sure to familiarise yourself with the relevant Product Disclosure Statement (PDS). Different policies can cover the same thing, but the limits can be what sets them apart from one another, and this is made clear in the PDS. For example, some Comprehensive policies may cover the cost of emergency repairs up to a maximum of $800, while another may cover a maximum of $1000.

If you decide on one type of insurance and then later change your mind, that’s OK! You can always contact your insurance provider to discuss your options, and determine whether you can adjust limits or jump up or down a level.