What car insurance you need in Australia depends on legal requirements and financial risk. Legally, you must have Compulsory Third Party insurance, known as CTP, Green Slip in NSW, MAI in QLD. CTP is mandatory to register your car and covers personal injury liability if you injure or kill someone in an accident. CTP is included in registration in VIC, QLD, WA, SA, TAS and NT, but in NSW and ACT you buy it separately. CTP does not cover any damage to cars or property. Beyond CTP, you need at least Third Party Property Damage insurance, which is not legally required but is highly recommended and costs $300 to $600 per year. It covers damage you cause to other people's cars, property, buildings and fences up to $20M. Without it, if you hit a Mercedes, Tesla or shopfront, you are personally liable for tens of thousands. For most drivers, comprehensive car insurance is what you need because it covers everything Third Party Property covers plus damage to your own car from at-fault accidents, theft, fire, storm, flood, vandalism and at-fault crashes, plus extras like towing, hire car and windscreen cover. Comprehensive is essential if your car is worth over $10,000, if you have a car loan, or if you could not afford to replace your car out of pocket. Third Party Fire and Theft is a middle option covering your car only for theft and fire. For most Australian drivers, the recommended combination is CTP plus comprehensive.
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