What are the disadvantages of fully comprehensive car insurance in Australia is that while it offers the best protection, it has some drawbacks compared to cheaper Third Party Property cover. The main disadvantage is cost. Comprehensive insurance costs $800 to $1,800 per year on average for a standard car, compared to $300 to $600 per year for Third Party Property Damage only, so you pay 2 to 3 times more. For older cars worth under $5,000 to $8,000, the premium can be 20% to 40% of the car's value per year, which may not be economical. Second, comprehensive has a higher excess. You pay your basic excess of $600 to $1,200 plus additional excesses for young drivers, unlisted drivers or inexperienced drivers, which can total $1,500 to $2,500 in a claim, so for minor damage under $2,000 it may not be worth claiming because you lose no-claim bonus. Third, making a claim can increase future premiums and reduce your no-claim rating from rating 1 at 60% discount to rating 6 at no discount, increasing next year's premium by $500 to $1,000. Fourth, comprehensive policies have many exclusions, such as not covering wear and tear, mechanical breakdown, driving under influence, unlicensed drivers, or using car for rideshare without declaration. Fifth, some cheap comprehensive policies like Bingle have restrictions like no hire car after accident, no choice of repairer, and limited windscreen cover. Finally, for very cheap cars, you may be over-insured, paying more in premiums over 3 years than the car is worth.
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