How Much Is Car Insurance in Australia?

By John Hewitt

  • Overview

    How Much Is Car Insurance in Australia?
    In Australia, as well as most modern countries, insurance companies determine the cost of coverage using a number of metrics - primarily the cost of the car modified by the company's assessment of the risk involved in insuring a particular driver. In Australia, insurance companies also take into account what postal code the driver usually parks in at night.
  • Identification

    A male driver in his mid-20s of a new sedan in Brisbane with a solid driving history could expect to pay between $500 and $900 per month for comprehensive coverage depending on the insurer. The older the driver and the safer the driving history - along with the safer the neighborhood where he parks the car at night - the lower the insurance rates will go. Insurance companies - both international and native to Australia - also compete with each other to provide the lowest rates to their customers.
  • Features

    Perhaps the largest single determinant of insurance price is the value of the car and how safe it is determined to be. Lighter, newer cars are more expensive to insure relative to heavy vehicles with low average speeds. Followed by that, the age of the driver and their record of accidents has the next-largest effect on price. Young drivers may find that sharing the car with an older, more experienced driver may lower their insurance rates.


  • Expert Insight

    In Australia, car dealerships often include car insurance in an auto loan at special low rates. Customers looking to lease a vehicle may discover that they end up paying much less on their mandatory comprehensive insurance if they get it as part of a complete deal with the loan than if they purchase it separately. Buyers should exercise caution, however, as unscrupulous lenders may take advantage of undereducated consumers by packaging in insurance plans that are above market prices. Compare rates before signing any loan papers. Only agents carrying an Australian financial services license are authorized to provide car loans and insurance policies.
  • Considerations

    Australian law only requires comprehensive auto insurance, which covers any damage caused to the policy holder's vehicle along with damage caused to other vehicles only in an accident. Third party auto insurance is completely optional. Policy holders who elect to get third party insurance may find that their rates decrease, as many companies are eager to provide package deals to consumers looking to insulate themselves from risk.
  • Function

    Most Australian car insurance policies also offer a policy option called Rating 1 Protection. This extra charge protects the driver's license rating even if she causes an accident. This policy is a particularly good idea for urban drivers who get into many frequent minor accidents - without such coverage, it can be all too easy to slip in ratings and end up needing to pay astronomically higher auto insurance rates.
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