For more on this part of the insurance industry:
1. visit our commercial fleet insurance page for a look at all products in this sector
2. or focus in on all of the individual vehicles insurance products available on IB Markets!
Individual vehicles insurance provides coverage for privately owned cars, protecting against financial losses from accidents, theft, or damage. In Australia, this insurance is essential due to high vehicle ownership rates and reliance on personal transportation.
The Australian individual vehicles insurance market was valued at around $21 billion, reflecting its significance in the economy.
Motorists can choose from various car insurance types, including mandatory compulsory third party (CTP), third-party property damage, and more. Each option addresses specific risks, allowing individuals to select protection that meets their needs and aligns with Australian regulations.
Emerging technologies and shifting consumer preferences are reshaping individual vehicles insurance in Australia. Telematics enables usage-based policies that reward safe driving and improve risk assessment. Rising car insurance costs push brokers to find new ways to meet client expectations. Other concerns include:
vehicle versus life insurance priority: Australians prioritise car insurance over life insurance, leaving gaps in overall financial protection
policy misuse in family violence cases: car insurance policies are being misused in domestic violence cases, raising concerns about policy management and safeguards
surge in parked car claims: damage to parked cars is becoming a major cause of insurance claims, posing significant threats for vehicle owners
Brokers should educate clients on risks like policy misuse and rising claims while highlighting cost-effective options like usage-based insurance. Tailored individual vehicles insurance helps minimise hazards and address underinsurance.
In Australia, compulsory third party (CTP) insurance is mandatory under state laws, such as the Motor Accident Injuries Act 2019 in NSW (MAI Act). While CTP covers personal injuries to others, it does not protect the vehicle or property. Here is how to distinguish the two:
CTP insurance: legally required, covering third-party injuries only
comprehensive insurance: covers the vehicle, others' property, theft, and fire
combined benefits: ensures legal compliance and protection from diverse risks
Choosing both types of insurance safeguards against financial burdens. Brokers can guide clients in selecting the right mix for their requirements.
There's a huge drop in car insurance costs after drivers turn 25. Younger drivers face higher premiums due to inexperience and increased risk factors. Competitive rates typically emerge after age 30 for drivers with clean records.
With only CTP insurance, a driver’s coverage is limited to injuries caused to others in an accident. This type of insurance does not protect the driver’s:
Drivers without additional coverage may face high out-of-pocket expenses for repairs or replacements. Comprehensive insurance can provide better financial protection by reducing these risks.
In Australia, comprehensive car insurance and third-party property damage insurance are the most popular options after mandatory CTP.
Comprehensive insurance is suited for drivers seeking broad coverage for a wide range of incidents and vehicle-related costs. Third-party property damage insurance offers a simpler, more affordable option, ideal for those with older vehicles or tighter budgets.
Insurance premiums differ based on factors like driving history, age, and vehicle type. Generally, experienced drivers over 25 with clean records secure more affordable rates. Choosing policies with higher excesses or going for third party property damage insurance can lower premiums.
In Australia, all vehicle owners must have CTP insurance. Beyond this, additional coverage is often needed for:
Deciding on the right individual vehicles insurance depends on personal circumstances, vehicle use, and financial priorities.
No, roadside assistance is not usually included in comprehensive car insurance in Australia. Some insurers offer it in the following ways:
optional add-on: many insurers allow customers to purchase roadside assistance for services like towing or emergency repairs
included in some policies: certain comprehensive insurance plans provide roadside assistance as part of their coverage
Clients should review individual vehicles insurance policy details carefully to understand inclusions. Brokers can help identify options that align with specific needs.
