What Does Car Insurance Cover? Key Inclusions & Exclusions

In Australia, car insurance can pay for everything from the medical bills of someone you accidentally injure (CTP) through to repairs on your own car, stolen-vehicle replacement, storm damage and multi-million-dollar liability for the other driver’s BMW — but only when you choose the right policy and understand where the cover stops.

Misreading the fine print can leave you footing a $15,000 hail repair, refunding a rideshare passenger’s lost luggage or even facing a lawsuit for a shopfront you’ve smashed. Knowing exactly what’s included, excluded and optional isn’t box-ticking; it protects your wallet, keeps you within the law and spares you the gut-drop moment of a rejected claim.

This guide strips away the jargon. First, it compares the four policy types every Aussie driver sees. Then it unpacks the inclusions inside comprehensive cover, spotlights common exclusions, and sizes up add-ons such as windscreen and hire-car protection. You’ll also get a step-by-step claims walk-through, an explainer on what drives your premium, rapid-fire FAQs and, finally, practical steps for locking in the right cover at the right price.

The Four Main Types of Car Insurance in Australia

Before diving into the nitty-gritty of inclusions and exclusions, it helps to know the four broad policy categories an Aussie motorist can buy. Think of them as rungs on a protection ladder: each step up adds another layer of financial safety, but also bumps up the premium. Only the first rung is compulsory nationwide; the other three are elective and sold by private insurers.

Compulsory Third Party (CTP/Green Slip)

CTP is the legal minimum. You can’t register a car without it, and driving without a current policy can land you hefty fines or—worse—personal liability for injury costs.

Covers: Death or bodily injury you cause to other road users—drivers, passengers, cyclists, pedestrians.
Doesn’t cover: Any damage to vehicles, fences, buildings or your own medical bills.
Naming quirks: In NSW it’s branded a “Green Slip”, while other states just roll it into the rego process. Either way, it’s the same safety net for third-party injuries.

Third Party Property Damage (TPPD)

TPPD is the first voluntary step up from CTP.

Covers: The cost of repairing or replacing someone else’s car or property when you’re at fault—e.g. rear-ending a Mercedes or wiping out a neighbour’s retaining wall. Most policies throw in $20 million legal liability as standard.
Doesn’t cover: Repairs to your own vehicle or fire/theft losses.
If you drive an older run-about but often park near high-end cars, TPPD can be a budget-friendly way to avoid a five-figure repair bill.

Third Party Fire & Theft (TPFT)

TPFT takes the TPPD foundation and adds limited protection for your own car.

Extra cover: Payout if your vehicle is stolen or damaged by fire (including arson).
Typical limits: Some insurers cap theft payouts at the car’s market value; excesses for fire claims can be higher than for collisions.
No cover still for crash damage to your car—so a prang that’s your fault leaves you paying your own repairs.

Comprehensive Cover

Comprehensive is the top shelf answer to the question “what does car insurance cover?” because it rolls almost everything into one policy.

Covers: Collision and accidental damage to your car (regardless of fault), theft, fire, vandalism, most weather events, plus the same third-party liability as TPPD.
Extra perks: Towing, emergency accommodation, new-for-old replacement for newer cars, and small allowances for personal belongings—details vary by insurer.
Comprehensive is usually required by finance companies on leased or loan-funded cars and delivers the peace of mind many drivers want, provided you’re across the exclusions we’ll discuss shortly.

What Comprehensive Car Insurance Typically Covers

A comprehensive policy is the broadest answer to “what does car insurance cover” in everyday Australian parlance. While wording differs between insurers, the backbone of cover is remarkably similar: protect your own car, protect other people’s cars or property, and throw in a bundle of convenience perks. The fine print (excesses, sub-limits, claim procedures) lives in the Product Disclosure Statement, but the headline inclusions below rarely change.

Collision & Accidental Damage to Your Vehicle

Whether you back into a bollard at Coles, get rear-ended at the lights or spin out on a wet bend, comprehensive insurance pays to repair or, if the cost is uneconomical, write off and settle your vehicle. Settlement is based on the value type you chose at policy start—market_value or agreed_value. Assessors look at repair quotes, parts availability and statutory write-off rules; if repairs exceed roughly 70% of value (varies by state), the car is deemed a total loss and you’re paid out minus any applicable excess.

Theft, Attempted Theft & Vandalism

Cars disappear from suburban driveways every night, and even an unsuccessful break-in can mangle locks, ignitions or windows. Comprehensive cover reimburses you for:

Full vehicle theft or permanent loss
Damage caused during attempted theft (e.g. screwdriver-damaged door)
Malicious damage like keyed panels, slashed tyres or smashed mirrors

Insurers usually require a police report within 24 hours and may ask for evidence such as CCTV or dash-cam footage. Expect a separate, sometimes higher, theft excess if you leave keys in the car or it’s stolen from an unsecured location.

Weather and Natural Disasters

Australia’s climate can be brutal. Most comprehensive policies list insured events including:

Storm and hail (dents, broken glass)
Cyclone and strong winds (falling trees)
Flood and flash flooding
Fire and bushfire ember attack
Earthquake and tsunami

Hail and flood claims can attract additional excesses or, in some budget policies, reduced payout ceilings, so check the PDS if you live in storm alley or a floodplain. You’re generally covered even if the car is parked, provided you took “reasonable precautions” such as closing windows.

Liability for Damage to Other Vehicles or Property

On top of fixing your own wheels, comprehensive insurance picks up the tab—often up to $20 million—for damage your car causes to someone else’s assets. That could be a luxury SUV you side-swiped, the council guardrail you bent or a shopfront you accidentally ploughed into. The insurer also funds legal defence costs if a liability lawsuit follows, sparing you eye-watering solicitor invoices.

Extra Built-In Benefits

Modern comprehensive policies read like mini–road trip survival kits. Common inclusions are:

Towing & storage: From the accident scene to the nearest authorised repairer.
Emergency transport & accommodation: Usually $200–$1,000 if you’re stranded 100 km or more from home.
New-for-old replacement: Entire vehicle replacement when written off within the first 1–3 years or under a set kilometre cap.
Personal effects cover: $500–$1,000 for damaged baby seats, laptops or golf clubs.
Lifetime repair guarantee: Work done by an insurer-authorised shop is warrantied for as long as you own the vehicle.

These built-ins vary, but they’re often what tip drivers toward comprehensive over cheaper tiers—the peace of mind that someone else handles the messy logistics after an incident.

Exclusions and Limits You Must Watch For

Comprehensive car insurance feels bullet-proof until you trip over the fine print. Every policy contains circumstances where the insurer can legally refuse or reduce a payout. Understanding these gotchas before you need to claim is the difference between a quick repair and a five-figure headache.

Driver Behaviour Exclusions

Your policy protects you from accidents, not bad decisions. Claims can be knocked back if, at the time of the incident, the driver was:

Over the legal blood-alcohol limit or under the influence of drugs
Unlicensed, suspended or disqualified
Street racing, drag racing or doing burnouts
Driving recklessly (e.g. 40 km/h over the limit, running from police)

If an excluded driver totals your car, the insurer may chase you personally for any third-party costs it had to cover.

Vehicle Condition & Maintenance Exclusions

Insurers expect you to keep the car roadworthy. They can decline claims caused by:

Pre-existing damage or rust
Bald tyres, faulty brakes or worn-out steering components
Mechanical or electrical failure that’s not the direct result of an insured event
Gradual wear and tear, corrosion or depreciation

Tip: hang onto service invoices and tyre receipts—assessors often ask for proof the vehicle was maintained.

Usage Exclusions

Using the car outside the purpose stated on your policy is a common slip-up. Typical no-cover scenarios include:

Accepting fares for rideshare, taxi or food delivery while on a “private use” policy
Commercial courier or rental hire operations
Track days, speed trials or organised off-road events
Towing loads above the manufacturer’s limit

If you occasionally moonlight for Uber or DoorDash, upgrade to a rideshare-friendly policy or risk footing every dollar of a claim.

Policy Limits, Excesses & Valuation Methods

Even when an event is covered, caps and excesses still bite:

Feature	Common Options	Watch-out
Vehicle value	`market_value` (fluctuates) vs `agreed_value` (fixed)	Market value drops each year; payout may not clear your car loan.
Standard excess	$600–$1,200	Payable on each at-fault claim.
Age / inexperienced driver excess	$400–$1,500	Applies if the driver is under 25 or licensed <2 years.
Event-specific excesses	Hail, flood, theft	Can double the cost payable on those claims.
Personal items sub-limit	$500–$1,000	Anything above comes out of your pocket.

Read these figures side-by-side with your budget before choosing a policy.

Geographic & Time-Based Exclusions

Cover is designed for normal Aussie motoring:

Damage occurring outside Australia or while the car is shipped overseas isn’t covered.
Leaving windows down, keys in the ignition or the vehicle unlocked may void theft claims.
Lending or renting the car to someone for reward (car-sharing platforms) without notifying the insurer is excluded.
Some insurers exclude damage if the vehicle is driven during a declared curfew (e.g. P-plate night restrictions) by an unlicensed driver.

Always skim the Product Disclosure Statement for these location and timing clauses—it takes five minutes and can save thousands later.

Optional Extras and Policy Add-Ons Explained

Even the best “off-the-shelf” comprehensive policies leave small gaps. That’s where add-ons step in, letting you boost protection for the stuff that matters most to your lifestyle without paying for bells you’ll never use. Below are the extras most Australians tag onto their cover; prices vary, so weigh the extra premium against the headache the add-on could save you.

Windscreen & Glass Cover

A stray stone can turn a clean windscreen into a jigsaw of cracks. Standard comprehensive cover will fix it, but you’ll usually cough up the full excess for the privilege. A windscreen add-on:

Waives or reduces the excess for one repair or replacement per policy year
Often extends to side and rear glass, sunroofs and built-in sensors
Kicks in even when the damage is a tiny chip you want filled before it spreads

If you rack up highway kilometres or park under gum trees, it’s a cheap stress-buster.

No-Claim Discount/Bonus Protection

Years of claim-free driving can slice 60% or more off your premium. One at-fault bingle, though, and that discount vanishes. Bonus protection “freezes” your no-claim rating after a set number of at-fault claims (usually one per year), preventing a nasty renewal jump. Eligibility normally requires:

Drivers over 25
A spotless recent claims record
All listed drivers holding full licences

Hire Car After Accident or Theft

Comprehensive insurance often covers a hire car only when you’re not at fault. This upgrade guarantees wheels even when you are. Check:

Daily allowance (e.g. $60) and maximum hire days (14–30)
Vehicle class—compact hatchbacks are standard; SUVs cost extra
Whether the benefit ends when your payout is made or when repairs are finished

Roadside Assistance & Emergency Towing Upgrades

If you’re not already with NRMA, RACV or similar, bolting insurer-branded roadside onto your policy can be cheaper than a standalone membership. Typical inclusions:

Battery jump-starts, flat-tyre changes, emergency fuel
Unlimited call-outs or a capped number per year
Extended towing distances beyond the basic post-accident tow already built in

Cover for Personal Items & Baby Gear

Standard personal-effects limits hover around $500. Upgrade cover lifts this to $2,000 or more and broadens the list of accepted items:

Prams, baby capsules and sports gear
Work tools and tradie equipment (subject to security conditions)
Portable tech like laptops and cameras

If you’re regularly carting valuables, the add-on costs far less than replacing a stolen stroller set. Taken together, these extras let you fine-tune exactly what does car insurance cover for your household without throwing money at features you’ll never use.

How the Claims Process Works, Step by Step

Even the best policy is only as good as its claims experience. Knowing what happens after a bingle, theft or hailstorm helps you stay calm, supply the right paperwork and get the wheels turning—literally—again. While each insurer’s admin varies, the sequence below is broadly the same across Australia and applies whether you’re with National Cover or another provider.

Immediate Actions After an Accident

Safety first, paperwork second.

Pull over and switch on the hazards if the car is drivable.
Check everyone for injuries and call 000 for police/ambulance if needed.
Swap details: names, licences, regos, insurer, phone numbers and the exact location.
Snap photos of damage, skid marks, street signs and any witnesses’ contact details.
Move vehicles off the road if safe; some states mandate it to keep traffic flowing.
Notify your insurer (many offer 24/7 hotlines or email lodgement); same-day notice is best practice even if you’re unsure about claiming.

Documents and Information Insurers Need

Having the right evidence prevents back-and-forth emails that drag out repairs. Expect to supply:

Completed claim form (online or PDF)
Police event or incident number (mandatory for theft, vandalism or injury crashes)
Photos/video from phones or dash-cams
Details of all drivers involved, including their licence class and expiry
Repair quotes if the car is still drivable
Tip: Keep service receipts handy; assessors sometimes ask for proof the vehicle was roadworthy.

Assessment, Authorised Repairs & Lifetime Warranty

Once the claim is lodged, the insurer appoints an assessor who may:

Inspect the car in person or via photo upload app
Decide between repair and total loss using the 70 % rule (cost vs value)
Allocate the job to an authorised repairer—this unlocks the lifetime workmanship guarantee most comprehensive policies include
If you choose your own workshop, check whether the guarantee still applies and whether any extra quote comparisons are required.

Navigating Not-at-Fault Situations

When another driver is 100 % liable:

Provide their insurer’s details and any admission of fault in writing
Your insurer can chase recovery of repair costs and your excess; many waive the excess upfront if fault is clear and the other party is identified
You’re usually entitled to a hire car while yours is off the road—confirm the daily cap before booking a luxury SUV

Timeline, Payouts & Dispute Resolution

Simple repair claims can wrap up in a fortnight; complex write-offs, parts shortages or liability fights can stretch to 6–8 weeks. If you’re unhappy with an outcome:

Lodge an Internal Dispute Resolution (IDR) request—insurers must respond within 30 days.
Escalate to the Australian Financial Complaints Authority (AFCA) if IDR fails.

Understanding this roadmap turns “What does car insurance cover after a crash?” into a process you can navigate with confidence.

Cost Factors: Why Premiums & Excesses Differ

Two drivers can own identical cars yet pay very different premiums and excesses. That’s because insurers crunch a stack of risk data—vehicle specs, driver behaviour, postcode crime stats, even spare-parts prices—before spitting out a quote. Understanding these levers lets you tweak the dials that are under your control and see why the answer to “what does car insurance cover and at what cost?” changes from one policy to the next.

Vehicle-Specific Factors

Insurers look well beyond the badge on the bonnet.

Make & model: A popular hatch with cheap panels is cheaper to fix than a European coupe with aluminium bodywork.
Age & value: New cars cost more to replace; older ones may be write-offs after minor damage.
Safety & security tech: Factory alarms, immobilisers and AEB lower theft and crash risk, shaving dollars off the base rate.
Modifications: Engine tunes, lift kits and aftermarket wheels boost risk and repair cost; premiums rise or cover may be excluded altogether.

Driver Profile & History

The person behind the wheel is as important as the machine.

Age & licence years: Statistically, drivers under 25 lodge more claims, so youth or provisional licences attract surcharges and extra excesses.
Claims & demerit record: A clean five-year history nets “rating one” discounts; recent at-fault claims push you the other way.
Occupation: Some jobs imply high annual kilometres (e.g. sales reps) or cautious habits (e.g. accountants); insurers price accordingly. Discrimination laws ban gender rating in most states, but historical data still weigh indirectly on risk models.

Where & How the Car Is Used

Location, location, location.

Postcode: Urban theft and crash hotspots cost more; rural areas see lower theft but higher wildlife claims.
Garaging: Locked garage beats street parking; some insurers verify via satellite imagery.
Kilometres: More road time equals more exposure. Policies offering capped-km discounts can save low-mileage drivers up to 20 %.
Business or rideshare use: Commercial kilometres bump premiums unless you switch to a specialist policy designed for that purpose.

Coverage Choices Affecting Price

Every extra benefit is effectively a pre-payment for future risk.

Excess level: Opting for a $1,500 excess instead of $600 can trim the annual premium by 15 – 30 %.
agreed_value vs market_value: Fixing the payout figure costs more but removes depreciation surprises after a write-off.
Add-ons: Windscreen, hire-car and no-claim bonus protection each add a small loading.

Discounts & Practical Ways to Save

A few smart moves can counter the premium creep:

Bundle multiple cars or add home insurance for a multi-policy discount.
Pay annually to dodge monthly admin fees.
Install insurer-approved tracking or dash-cam devices—some offer telematics-based safe-driver rebates.
Compare quotes every renewal; even a quick check of your “quote-to-value” ratio can reveal hidden bloat.
Keep your claims record spotless; maintaining maximum no-claim bonus is still the biggest single price lever.

By spotting which variables are negotiable and which are baked in, you can shape a policy that fits both your budget and the protection you expect.

Quick-Fire FAQs on Car Insurance Cover

Pressed for time? The bite-sized answers below clear up the questions we see most often in quote calls and Google’s People-Also-Ask box. Scan them now, bookmark them for later and dodge the awkward surprises that can pop up at claim time.

Does comprehensive insurance automatically cover windscreens?

Yes—but only to a point. A standard comprehensive policy pays to repair or replace damaged glass, yet you’ll usually stump up the full excess unless you’ve bought the windscreen add-on. That optional extra waives or slashes the excess (often to $0) for one windscreen, window or sunroof claim each policy year and covers tiny chip repairs before they spider out.

Are my personal belongings inside the car covered?

Most insurers toss in a personal-effects allowance of $500–$1,000 for items damaged or stolen during an insured event. Think baby seats, laptops, sunglasses and sports gear. Cash, smartphones and business tools are often excluded or capped at far lower limits. If you cart pricier kit—camera rigs, tradie tools—look for the upgraded “personal items” add-on or insure them under a separate contents policy.

What happens if someone else is driving my car?

Occasional use by a fully licensed friend or family member is generally fine, but you must list anyone who drives the car regularly (or lives at the same address). If an undeclared young or inexperienced driver prangs it, the claim may still proceed, yet an additional excess of $400–$1,500 usually applies. Unlicensed or intoxicated drivers? Expect the claim to be rejected entirely.

How does insurance work if the car is under finance or lease?

The financier’s interest is noted on the policy, and comprehensive cover is normally compulsory under the loan or novated-lease contract. If the vehicle is written off, the insurer pays the agreed or market value directly to the lender first; any leftover balance comes to you. Gap insurance can plug any shortfall between the payout and what you still owe.

Can I switch insurers before my policy expires?

Absolutely. Take out a new policy first to avoid any cover gap, then cancel the old one. You’re entitled to a pro-rata refund of unused premium minus a small cancellation fee (often $30–$50). Switching mid-term can be a savvy way to lower costs or upgrade features when you realise your current plan no longer matches what car insurance should cover for your needs.

Key Takeaways on Car Insurance Cover

CTP is non-negotiable; it only handles injuries you cause, not panel damage.
TPPD and TPFT add property and fire/theft protection, but any crash damage to your own car is still your problem.
Comprehensive cover answers the wider question of what does car insurance cover, paying for your vehicle, other people’s property, theft, weather events and built-in perks like towing.
Every policy comes with exclusions—driver behaviour, poor maintenance, business use—and limits, so skim the PDS before hitting ‘buy’.
Optional extras (windscreen, hire-car, bonus protection) let you plug the gaps that matter to your lifestyle without overpaying for bells you don’t need.
Shopping around, raising your excess and keeping a clean driving record are the surest ways to shrink premiums without shrinking cover.

Ready to see how much you could save? Grab an obligation-free quote from National Cover today.