Insurance Questions, Answered

What Does Comprehensive Car Insurance Cover in Australia?

Comprehensive car insurance covers accidental damage to your own vehicle (regardless of fault), theft, fire, storm, hail, and flood damage, plus damage you cause to other people's vehicles or property. It is the broadest level of voluntary car cover available in Australia.

What Is the Difference Between Comprehensive and Third Party Car Insurance?

Comprehensive car insurance covers your own vehicle for accidents, theft, and weather events, plus damage to third parties. Third party property insurance only covers damage you cause to other people's cars or property — your own vehicle is not covered at all.

How Much Does Car Insurance Cost in Australia?

Comprehensive car insurance in Australia typically costs between $800 and $2,000 per year for an average vehicle, though premiums vary significantly based on the car's value, your age, driving history, location, and chosen excess. Younger drivers and high-risk postcodes attract substantially higher premiums.

What Is CTP Insurance in Australia?

CTP (Compulsory Third Party) insurance covers compensation for people who are injured or killed in an accident involving your vehicle. It is legally required for all registered vehicles in Australia and does not cover property damage — only personal injury claims.

What Is Agreed Value vs Market Value Car Insurance?

Agreed value car insurance fixes a specific payout amount at the start of your policy — so you know exactly what you'll receive if your car is written off. Market value insurance pays what your car is worth at the time of the claim, which is lower because vehicles depreciate over time.

Does Car Insurance Cover Theft in Australia?

Comprehensive car insurance covers theft of your vehicle and typically covers theft of personal items inside the car up to a specified limit. Third party property insurance does not cover theft at all. Third party fire and theft cover includes theft as an explicit add-on.

What Is a Car Insurance Excess?

A car insurance excess is the amount you must contribute towards the cost of a claim before your insurer pays the rest. A higher excess means lower premiums, but you pay more out of pocket when claiming. Most policies have a basic excess plus additional excesses that may apply in certain situations.

How Do I Make a Car Insurance Claim in Australia?

To make a car insurance claim in Australia, document the scene with photos, exchange details with other parties, report to police if required (e.g. theft or injury), then notify your insurer as soon as possible through their claims line or online portal. Your insurer will guide you through the repair or replacement process.

Can I Drive Another Person's Car on My Insurance?

In Australia, car insurance follows the vehicle — not the driver. If you drive someone else's car, you are typically covered by their comprehensive policy, not yours. However, if you are not listed as a driver on their policy, an unlisted driver excess will usually apply, and in some cases cover may be reduced or voided.

What Factors Affect Car Insurance Premiums in Australia?

Car insurance premiums in Australia are primarily influenced by the vehicle's value and theft risk, the driver's age and claims history, the postcode where the car is garaged, the level of cover selected, and the chosen excess. Younger drivers, high-value vehicles, and urban postcodes with higher theft rates attract the highest premiums.

What Does Home and Contents Insurance Cover in Australia?

Home and contents insurance typically covers your building structure and/or personal belongings against fire, storm, theft, accidental damage, and water damage. Building insurance covers the physical structure, while contents insurance covers your furniture, electronics, clothing, and other possessions.

What Is the Difference Between Building and Contents Insurance?

Building insurance covers the physical structure of your property — walls, roof, floors, and permanent fixtures — against damage or destruction. Contents insurance covers your personal possessions inside the property, such as furniture, appliances, clothing, and electronics.

Does Home Insurance Cover Flood Damage in Australia?

Most standard home insurance policies in Australia now include flood cover following the standardisation of the definition of 'flood' after the 2011 Queensland floods. However, some policies still exclude flood or offer it only as an optional extra, and properties in high-risk flood zones may face exclusions or significantly higher premiums.

How Do I Calculate the Replacement Value of My Home for Insurance?

Home insurance replacement value is the cost to completely rebuild your home from the ground up if it were destroyed — not its market sale price. You need to calculate the floor area multiplied by local construction costs per square metre, plus demolition, architect fees, and any special features of your home.

What Is Not Covered by Home Insurance in Australia?

Home insurance typically does not cover gradual deterioration, general wear and tear, pest or vermin damage, mechanical breakdown, flood in some older or budget policies, intentional damage by an insured person, earth movement, and motor vehicles. Business-related items kept at home are also commonly excluded.

Do I Need Home Insurance in Australia?

Home insurance is not legally compulsory in Australia, but if you have a mortgage your lender will require you to hold building insurance as a condition of the loan. For any homeowner, carrying home and contents insurance is strongly recommended given the high cost of rebuilding or replacing belongings after a major loss.

What Is Public Liability Insurance?

Public liability insurance covers your legal defence costs and any compensation you are ordered to pay if a third party — a customer, visitor, or member of the public — is injured or has their property damaged as a result of your business activities. It is one of the most important covers for any business that interacts with the public.

How Much Public Liability Insurance Do I Need in Australia?

Most Australian businesses need at least $5M to $10M in public liability cover. Government contracts, construction projects, and leased commercial premises typically require $20M as a minimum. The right amount depends on your contractual requirements, the scale of your business, and the nature of your public interactions.

What Is Professional Indemnity Insurance?

Professional indemnity (PI) insurance covers you if a client claims your professional advice, services, or work caused them financial loss. It pays your legal defence costs and any compensation awarded. PI is mandatory for many licensed professions in Australia including financial advisers, accountants, lawyers, engineers, and healthcare practitioners.

Do I Need Business Insurance as a Sole Trader in Australia?

As a sole trader in Australia, you have unlimited personal liability — meaning your personal assets (home, savings, car) are at risk if a claim is made against your business. Public liability insurance and professional indemnity insurance are strongly recommended, and may be required by your clients or licensing body.

What Is Business Interruption Insurance?

Business interruption (BI) insurance covers the loss of revenue and ongoing fixed expenses — such as rent, loan repayments, and wages — when your business cannot operate due to physical damage from an insured event like fire, storm, or flood. It bridges the financial gap while you rebuild or relocate.

What Is Commercial Property Insurance?

Commercial property insurance covers your business building, contents, stock, and equipment against damage or loss from fire, storm, theft, vandalism, and accidental damage. It is the business equivalent of home and contents insurance, protecting the physical assets your business relies on.

What Is Product Liability Insurance?

Product liability insurance covers you if a product your business manufactures, distributes, imports, or sells causes injury to a person or damage to property. It covers your legal defence costs and any compensation awarded. In Australia, product liability is often included within a public liability policy.

What Is Management Liability Insurance?

Management liability insurance protects company directors, officers, and the business against claims arising from their management decisions and conduct. It typically combines directors and officers (D&O) liability, employment practices liability, statutory liability, and crime cover under one policy.

What Is Cyber Insurance and Do I Need It in Australia?

Cyber insurance covers the financial costs of responding to a cyber attack or data breach — including forensic investigation, system restoration, customer notification, regulatory fines, business interruption losses, and third-party liability if customer data is compromised. In Australia, any business holding personal data should seriously consider it.

What Insurance Does a Tradesperson Need in Australia?

Tradespeople in Australia typically need public liability insurance (most contracts require at least $5M–$10M), tools and equipment cover to protect gear from theft or damage, and income protection insurance to replace income if injury prevents work. Builders and contractors also need contract works insurance for the projects they are working on.

What Insurance Does a Builder Need in Australia?

Builders in Australia need public liability insurance ($10M–$20M is standard), contract works insurance to cover the project under construction, and home warranty insurance for residential builds over a threshold value. If you employ staff, workers compensation is compulsory. Tools, plant and equipment cover is also essential.

What Is Contract Works Insurance?

Contract works insurance (also known as construction all risks or CAR insurance) covers a construction project against physical damage while it is being built — including fire, storm, accidental damage, vandalism, and theft of materials. It protects the builder and owner's financial interest in the works before practical completion.

What Insurance Does a Plumber Need in Australia?

Plumbers in Australia need public liability insurance (typically $10M, as required by most plumbing licences and building contracts), tools and equipment insurance, and income protection. Plumbers who design systems may also need professional indemnity. Workers compensation is required if you employ staff.

What Insurance Does an Electrician Need in Australia?

Electricians in Australia need public liability insurance as a condition of their electrical contractor licence, tools and equipment cover, and income protection. Given the high-risk nature of electrical work, adequate public liability cover (minimum $5M–$10M) is critical, as electrical faults can cause significant property damage or serious injury.

What Is Income Protection Insurance in Australia?

Income protection insurance pays you a monthly benefit — typically up to 70% of your pre-disability income — if you are unable to work due to illness or injury. Benefits are paid monthly for a defined benefit period (usually 2 years, 5 years, or to age 65) after an initial waiting period.

What Does Life Insurance Cover in Australia?

Life insurance in Australia pays a tax-free lump sum to your nominated beneficiaries if you die, or to you directly if you are diagnosed with a terminal illness with less than 12–24 months to live. It is designed to replace lost income, pay off debts, and provide financial security for dependants.

How Much Life Insurance Do I Need in Australia?

As a general guide, Australians are typically advised to hold life insurance equal to 10–12 times their annual income, plus enough to clear all debts (particularly the mortgage). The right amount depends on your number of dependants, your partner's income, existing super cover, and your family's ongoing financial needs.

What Is TPD Insurance in Australia?

Total and Permanent Disability (TPD) insurance pays a lump sum if you become totally and permanently unable to work — either in your own occupation or any occupation depending on your policy definition. The payment is designed to cover rehabilitation, debt repayment, home modifications, and long-term care costs.

What Is Trauma Insurance in Australia?

Trauma insurance (also called critical illness cover) pays a tax-free lump sum if you are diagnosed with a specified serious illness such as cancer, heart attack, stroke, or coronary bypass surgery — regardless of whether you can continue working. It is designed to cover medical treatment costs, time off during recovery, and financial adjustments to your life.

What Is the Difference Between Life Insurance and Income Protection?

Life insurance pays a lump sum to your beneficiaries when you die or are terminally ill. Income protection pays you a monthly benefit — up to 70% of your income — while you are alive but unable to work due to illness or injury. They are complementary covers that address different financial risks.

What Is Supercar Insurance in Australia?

Supercar insurance is specialist insurance for high-performance, exotic, and prestige vehicles — including Ferrari, Lamborghini, Porsche, McLaren, and similar makes. It differs from standard comprehensive car insurance in how the vehicle is valued (agreed value is standard), which repairers are approved, and options for limited use or collection storage cover.

Why Do Supercars Need Agreed Value Insurance?

Supercars and exotic vehicles require agreed value insurance because market value assessments by standard insurers frequently undervalue exotic cars — particularly limited-production, appreciating, or imported models. Agreed value fixes the payout amount upfront so you receive the full insured sum on a total loss, regardless of market fluctuations.

Does Supercar Insurance Cover Track Days in Australia?

Standard comprehensive car insurance does not cover damage occurring on a racetrack or during any competitive or timed driving event. Specialist supercar insurance policies can include optional track day cover for non-competitive circuit driving, but it must be specifically endorsed onto the policy — it is never included automatically.

What Does Travel Insurance Cover in Australia?

Travel insurance typically covers overseas medical emergencies and evacuation, trip cancellation or curtailment, lost, stolen, or delayed baggage, travel delays, and personal liability. The single most important coverage for international travel is overseas medical — costs for medical treatment and evacuation overseas can easily exceed hundreds of thousands of dollars.

What Is a Pre-Existing Condition in Travel Insurance?

A pre-existing condition in travel insurance is any medical condition, illness, or injury that you knew about or sought treatment for before your policy was purchased. Most travel insurance policies exclude claims arising from pre-existing conditions unless you declare them and the insurer agrees to cover them — often for an additional premium.

Do I Need Travel Insurance for Domestic Travel in Australia?

For domestic travel within Australia, Medicare covers your medical expenses, so the value of domestic travel insurance lies in trip cancellation cover, luggage protection, and travel delay benefits — not medical cover. Whether it's worth it depends on the cost of your prepaid bookings and your risk tolerance.

What Is an AFSL in Australia?

An Australian Financial Services Licence (AFSL) is a licence issued by the Australian Securities and Investments Commission (ASIC) that authorises a business to provide financial product advice, deal in financial products (including insurance), and operate financial markets. Insurance brokers and insurers must hold an AFSL or operate as an authorised representative of an AFSL holder.

What Is the Duty of Disclosure in Insurance?

The duty of disclosure in Australian insurance requires you to tell your insurer every matter you know, or a reasonable person in your circumstances would know, is relevant to the insurer's decision to provide cover and on what terms. For consumer insurance contracts, this has been replaced by a duty to take reasonable care not to make a misrepresentation.

What Is an Insurance Excess?

An insurance excess (also called a deductible) is the amount you are required to pay towards the cost of a claim before your insurer pays the remainder. Choosing a higher excess lowers your premium, but means you pay more out of pocket if a claim occurs.

What Is an Insurance Premium?

An insurance premium is the amount you pay to your insurer — typically monthly or annually — to maintain your insurance coverage. Premiums are set based on the insurer's assessment of the likelihood and potential cost of a claim, your specific risk profile, and the level of cover provided.

What Is an Insurance Exclusion?

An insurance exclusion is a provision in your policy that removes cover for a specific circumstance, event, condition, or type of loss. Exclusions define the limits of what your insurer will pay for, and understanding them before you need to claim is essential to avoid surprises.

What Is Underinsurance in Australia?

Underinsurance occurs when the sum insured on your policy is less than the true cost to replace or rebuild what you have insured. If you make a total loss claim and are underinsured, you receive less than you need — leaving you to cover the shortfall yourself. Studies suggest more than 80% of Australian homes are underinsured.

What Is AFCA and How Do I Make a Complaint?

The Australian Financial Complaints Authority (AFCA) is a free, independent external dispute resolution body for complaints about financial services and products including insurance. If your insurer has not resolved your complaint through their internal process, AFCA can investigate and make binding decisions on insurers.

What Is a Product Disclosure Statement (PDS) in Insurance?

A Product Disclosure Statement (PDS) is a legally required document provided by an insurer that sets out the key features, coverage, exclusions, conditions, and costs of an insurance policy. You must receive a PDS before or at the time of purchase, and it is the definitive source of what your policy does and does not cover.

What Is an Insurance Broker and What Do They Do?

An insurance broker is a licensed professional who acts on your behalf — not the insurer's — to find, compare, and arrange insurance coverage. They are required to hold an Australian Financial Services Licence (AFSL) or be an authorised representative of one, and they have a legal duty to act in your best interest.

What Is the Difference Between an Insurance Broker and an Insurance Agent?

An insurance broker acts on behalf of the client and can access products from multiple insurers. An insurance agent acts on behalf of a specific insurer and can only sell that insurer's products. Brokers have a legal duty to act in your best interest; agents do not — they work for the insurer.

How Does an Insurance Broker Get Paid?

Insurance brokers in Australia are primarily paid by commission — a percentage of the premium paid to the insurer, typically ranging from 5% to 20% depending on the type of insurance. Some brokers also charge a professional fee for complex placements. By law, they must disclose their remuneration to you in a Financial Services Guide (FSG) before providing advice.

Why Use an Insurance Broker Instead of Going Direct?

Using an insurance broker means an expert who is legally obligated to act in your interest shops the market on your behalf, tailors cover to your specific situation, and advocates for you when you make a claim. Going direct means buying from a single insurer's sales team with no ability to compare alternatives or receive personalised advice.

How Do I Choose an Insurance Broker in Australia?

When choosing an insurance broker in Australia, verify their AFSL or authorised representative status via ASIC Connect, look for specialist experience in your industry or risk type, confirm they disclose their remuneration clearly in their FSG, and ask about their claims advocacy track record — which is where broker quality truly shows.

Is It Cheaper to Use an Insurance Broker?

Using an insurance broker is not always cheaper in terms of premium — broker commissions are included in the price. However, brokers often access wholesale rates, negotiate better terms, and reduce the risk of underinsurance or gaps in cover that can be far more costly than any premium saving. The value is in coverage quality and claims outcomes, not just upfront price.