Best car insurance in Australia in 2025

Each year in Australia, thousands of drivers face significant repair bills, with the average cost of a single accident often exceeding $3,000 out of pocket. Car insurance is not just a safeguard here—it’s a legal requirement, with compulsory third party (CTP) cover needed to register your vehicle in every state and territory. Yet, this basic insurance only covers injuries to others and does not protect against theft, vandalism, or damage to your own car.

Challenges for Aussie drivers often include harsh weather events, wildlife collisions, and a high rate of vehicle theft in certain areas. Many policies come with limitations such as excess payments, exclusions for some accident types, or restrictions on when and how claims are processed, making it vital to carefully compare your options. The right coverage can mean the difference between a manageable claim and a crippling financial setback.

At HelloSafe, our team of local experts independently assess the most reputable insurers and policies across Australia. Our mission is to give you transparent, reliable advice, practical comparisons, and tailored guidance, letting you save time and money while driving with real peace of mind.

How Does Car Insurance Work in Australia?

Car insurance in Australia is compulsory for all registered vehicles, with at least compulsory third party (CTP) cover required to protect against claims for injury to others. Beyond CTP, drivers can choose between third party property, third party fire and theft, and comprehensive policies—each offering progressively broader protection, including cover for your own vehicle and damage to others. These policies are provided by private insurers and come with options tailored to different budgets, driving habits, and coverage needs.

Choosing an appropriate car insurance plan in Australia ensures you comply with the law, benefit from financial protection in case of accidents or theft, and access additional benefits such as roadside assistance, windscreen cover, and even international driving protection with some plans. Flexible formulas and reimbursement levels let you match cover to your car usage—whether for city commuting, regional travel, or occasional trips—making it easy to find a policy that suits your needs and budget.

What Does Car Insurance Cover?

Car insurance in Australia is designed to protect drivers, their vehicles, and third parties against financial losses resulting from accidents, theft, and other risks. The basic compulsory cover, called CTP (Compulsory Third Party), is mandatory in every state and covers liability for injuries caused to other people. Optional upgrades include Third Party Property, Fire & Theft and Comprehensive insurance, which extend protection to damage to other vehicles, your own car, theft, fire, vandalism, and a broader range of incidents. Reimbursement works by submitting a claim to your insurer after an insured event, with the provider paying for covered losses minus any agreed deductible (excess). Waiting periods are rare and typically only apply to specific add-ons or new policies.

What is Usually Not Covered by Car Insurance?

Australian car insurance policies commonly exclude claims resulting from intentional or criminal acts, such as deliberate damage or fraudulent claims. Damage due to lack of regular maintenance, general wear and tear, or mechanical failure is not covered. Policies typically deny claims if the driver is unlicensed, under the influence of alcohol or drugs, or not approved under the policy. Most insurers also exclude cover for personal belongings left inside the vehicle, as well as situations where policy limits are exceeded or the car is used outside the agreed purposes (such as for ride-sharing without prior disclosure). Certain incidents occurring outside Australia or in unapproved geographical areas, and damages during illegal or off-road activities, are also frequently excluded.

How Much Does Car Insurance Cost in Australia?

Car insurance pricing in Australia depends on several factors including the driver’s age, driving history, type of policy (such as liability only vs. full coverage), deductible amount, where you live, vehicle make and model, and how far you drive each year. Younger drivers and those with a history of at-fault accidents or traffic violations will typically pay higher premiums because insurers see them as higher-risk customers.

Premiums also tend to increase as drivers age past a certain point, due to increased accident risk among senior drivers.

Living in a high-risk area (with higher rates of theft, vandalism, or accidents) raises your premium, as does owning a valuable or high-performance vehicle.

Claims history has a significant effect: multiple at-fault claims or serious traffic offences can trigger steep premium hikes or even loss of cover.

Opting for extra features or lower deductibles, adding extra drivers, or upgrading to comprehensive insurance will also increase what you pay.

Insurers use these and other local risk data to calculate a premium designed to accurately reflect both the likelihood and potential cost of claims in Australian conditions.

Best Car Insurance in Australia

Best for everyday commuting (school/work)

NRMA “Comprehensive Plus” is ideal for commuters, offering extensive protection including liability, collision, fire, theft, and up to AU$90,000 in emergency cover. It features new-for-old vehicle replacement (up to 3 years), excess-free windscreen repair, and nationwide roadside assistance, making it highly convenient and reliable for daily use.

Best for families with multiple vehicles

AAMI “Comprehensive Car Insurance (Multi-Policy Discount)” stands out for families, as it allows bundling multiple vehicles under one policy with progressive discounts and flexible coverage for all drivers in the household. It covers accidental damage, theft, third-party claims, new car replacement (up to 2 years), and offers up to AU$20 million in liability protection.

Best for tight budgets

Budget Direct “Comprehensive Car Insurance” is a top pick for budget-conscious drivers, with premiums among the lowest nationwide and customizable excess options to keep costs down. It covers collision, theft, weather, and third-party liability, while also offering discounts for good drivers and online applications.

Best for expats or international drivers

Allianz “Comprehensive Car Insurance” is a strong option for expats and internationals, as it recognizes overseas driver’s licences and supports easy transfer of no-claims bonuses from approved countries. It provides broad cover, including damage, theft, weather, emergency accommodation and up to AU$20 million for liability, with a streamlined digital onboarding process.

Best for senior drivers

Apia “Comprehensive Car Insurance” is designed specifically for older Australians, with dedicated call centres and premium reductions for low-kilometre drivers. It provides comprehensive accident, theft, storm, and third-party cover, plus roadside assistance as an optional extra—making it ideal for retirees or occasional drivers.

Best for students or young drivers

Bingle “Comprehensive Car Insurance” offers affordable, digital-first cover for young drivers, with a simple app-based claims process and flexible excess. The insurance includes all accident types, fire, theft, and up to AU$20 million in liability cover, appealing to students who value low prices and quick, online service.

Best for flexible month-to-month coverage

Huddle “Comprehensive Car Insurance” is perfect for those needing flexibility, offering policies you can pause or cancel monthly without penalties. Cover includes accidents, theft, storms, and more—with rapid claims processing entirely online, well-suited for drivers with changing circumstances such as gig workers or temporary residents.

How to Lower the Cost of Your Car Insurance?

Here are some of the best ways to lower your car insurance premiums in Australia:

• Compare offers: Use the HelloSafe comparison tool at the top of the page to quickly find and secure the most competitive car insurance quotes.
• Increase your excess: Opting for a higher excess means you’ll pay less on your regular premium, as long as you’re comfortable covering that amount should you need to claim.
• Maintain a clean driving record: Safe drivers with no recent claims, fines, or at-fault accidents are often rewarded with lower premiums.
• Choose your car wisely: Vehicles with strong safety features and lower repair costs typically attract cheaper insurance rates.
• Limit your annual mileage: If you drive fewer kilometres each year, be sure to inform your insurer—lower usage often reduces your premium.
• Bundle your policies: Combining your car insurance with other products like home insurance can earn you a valuable multi-policy discount.
• Park your car securely: Storing your car in a locked garage or secure area can reduce the risk of theft and lead to potential savings.
• Consider telematics or usage-based policies: Some insurers offer pay-as-you-drive options or monitor driving habits, rewarding careful drivers with additional discounts.

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Jennifer Taylor

Personal finance writer

Jennifer is an Australian personal finance writer passionate about helping people take control of their financial lives. She holds a degree in Economics from the University of Melbourne and completed a postgraduate diploma in Financial Planning at UNSW. Before joining HelloSafe, she worked in both consumer finance and digital publishing, focusing on simplifying complex financial topics for a wider audience. At HelloSafe, Jennifer creates clear and practical content about insurance, loans, savings, and budgeting—tailored to the realities of everyday Australians looking to make smart money decisions.