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Frequently asked questions


What is car insurance?

Car insurance is a contract whereby, in exchange for a premium, your insurer agrees to pay you a sum of money (‘benefit amount’) to cover the cost of damage to or loss of your vehicle, among other things.

There are four main types of general car insurance; one is compulsory, three are optional:

Compulsory third party insurance – by law, you must have CTP insurance. It covers claims made against you for injuring or killing someone in an accident. CTP does not cover damage to your vehicle or other people’s property (e.g. their car or home).

Third party property insurance – covers damage caused by your vehicle to other people’s property (e.g. their car or home) – not damage to your vehicle (unless it’s damaged in a no-fault accident with an uninsured driver, in which case you may receive limited cover). It’s popular among motorists with low-value vehicles.

Third party, fire and theft insurance – same as ‘Third party property’ plus cover for loss or damage to your vehicle if it is stolen or catches fire. It does not cover damage caused by attempted theft or items stolen from your car.

Comprehensive insurance – covers the repair or replacement of your vehicle following an accident – regardless of who’s at fault – malicious damage, fire, bad weather or theft. It also covers damage caused by your vehicle to other people’s property (e.g. their car or home).

The type of insurance you have is shown on your insurance certificate.

Types of car insurance

Type of insurance

Damage to your car

Damage to other people’s property

Damage or loss caused by fire or theft

Injuries or death to other people

Compulsory third party

No No No Yes

Third party property

No Yes No No

Third party, fire and theft

No Yes Yes No


Yes Yes Yes No

Note: In some states, CTP goes by other names, e.g. ‘greenslip’ in New South Wales.

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Comprehensive Car Insurance

Third Party Car Insurance

New South Wales CTP (greenslip) Insurance

Does comprehensive insurance cover more than just the cost of loss of or damage to my or other people’s property?

Yes. Budget Direct’s Comprehensive Car Insurance covers not only the cost of loss or damage to your car and damage caused by your vehicle other people’s property, but also:

  • personal effects
  • replacement keys
  • trailer
  • emergency transport and accommodation
  • new car replacement


For more details, including the most we’ll pay for these benefits, read the product disclosure statement.

What are ‘exclusions’?

Exclusions are situations or circumstances that your insurance policy does not cover.

For example, your policy does not cover you (or other, listed drivers) if you have an accident while unlicensed or under the influence of drugs or alcohol.

For the full list of exclusions, including the terms and conditions that apply, read the product disclosure statement.

How soon after buying my car must I insure it?

You are responsible for your car as soon as you buy it; before driving it anywhere, make sure it’s insured.

You’ll be required to take out compulsory third party (CTP) insurance when you register your vehicle. CTP doesn’t cover loss or damage to your car or other people’s property, so you might want to consider getting additional cover.

When you buy a policy from us, we’ll give you a policy or cover note number. This number will cover you until we send you the formal insurance documents.

If you’re trading in your vehicle, ask your insurer to cancel your existing policy and issue you with a new one. If you’re getting your car financed, ask the finance company whether they have any special insurance requirements.

What information do you need about my car?

When you go online or call to get a car insurance quote, we’ll ask you for your car’s registration number. If you’ve just bought the car and it’s not yet registered, you can give us the vehicle identification number (VIN) instead. It can be found on the engine, the inside of most car doors, or in the car dealership’s paperwork.

How much can I insure my car for?

With Budget Direct, you have the option of insuring your car for its market value or an agreed value.

Market value is the reasonable cost to replace your vehicle with one of the same make, model, age and condition. Your car depreciates as it ages – the older it is, the lower its market value. To get an idea what your used car is worth, search for it in the Red Book.

Agreed value is the amount you and Budget Direct agree to insure your car for. The agreed value can be lower or – as is usually the case – higher than the market value. If you insure your car for more than the market says it’s worth, you’ll pay a higher premium, and vice-versa.

We may offer you an agreed value, provided:

  • your car is less than 10 years old
  • your vehicle has not been converted to LPG, and
  • the agreed value is within an acceptable range of the market value.


The value for which your car is covered is shown on your insurance certificate.

How is the cost of car insurance – the premium – calculated?

There are lots of factors that can influence your premium, which is calculated according to the likelihood of you making a claim and how expensive any claim is likely to be. The main factors are:

  • your level of cover
  • value for which your car is covered
  • insurance excess – the higher your excess, the lower your premium and vice-versa
  • your age – typically, younger drivers pay more
  • type of car – the less expensive and/or powerful your car is, the lower the premium tends to be
  • car use – someone who drives their car to work, for example, may pay more than someone who catches public transport
  • where you keep your car – depending on the amount of crime there is in your postcode area, the premium may be higher, especially if you park your car on the road (as opposed to in a garage)
  • driving record – the more points you have on your licence or accidents you’ve caused, the higher your premium – assuming the insurance company agrees to cover you; a clean record could earn you a discount
  • the state you live in – depending on your state or territory’s theft rate and driving population, the premium may vary.



How can I pay for my car insurance?

You can pay your premium by direct debit from your bank account or credit card, or by PayPal (online payments only). You can pay fortnightly, monthly or annually (the last option is the most economical).

What is car insurance excess?

An excess is the fixed amount you pay towards a claim you make on your car insurance policy.

For example, if you are deemed at fault for the damage and your excess was $600 and your damage bill $3000, you would pay $600 and we would pay $2400. If the damage was $600 or less, you would pay the entire bill.

If your vehicle was written off, the excess would be deducted from the final settlement amount paid to you.

Reasons for excess

The excess is designed mainly to:

  • encourage policyholders to drive carefully
  • eliminate small claims that have a high administrative cost relative to the value of the claim – which in turns helps keep your premiums down.


Types of excess

Your Budget Direct policy may include one or both of the following:

  • Basic Excess, which applies to all claims
  • Additional Excesses, which apply when your car:
  • is driven by someone relatively young or inexperienced
  • driven by someone not listed on your insurance certificate
  • exceeds the ‘kilometres per year’ you selected (assuming you have a low-kilometres policy).


Reduce your excess

You can reduce your Basic Excess, which will increase your premium, and vice-versa.

You also have the option of reducing the excess payable on claims for damaged car windows.

Excess waiver

We will waive your excess if:

  • you were not at fault
  • you can provide the name and address of the person who was at fault
  • the amount of your claim is more than your Basic Excess.


Which excesses apply to me?

The excesses that apply to you are shown on your certificate of insurance.

Which drivers need to be listed on my policy?

You must list any household members (including learner, provisional and occasional drivers) who may drive the car. Unlisted household members won’t be covered.

Any non-household members who drive the car are automatically covered, however an additional excess of $600 applies (unless they are listed on your policy).

I’ve had a car accident – what should I do?

If you’ve had an accident, and assuming you’re physically able to, you should:

  1. Make sure you and anyone else involved is safely off the road.
  2. Call 000 if there are injuries or hazards; or a driver appears to be under the influence of alcohol or drugs
  3. Get the details of the other drivers – name, address and registration – and give them yours (it’s a legal requirement; if anyone refuses, call 000).
  4. If possible, take photographs of the accident scene.
  5. Contact us to organise a tow (if you can’t drive your vehicle) or, if you prefer, book your own.
  6. Make a claim


My car has been stolen – what should I do?

  1. Call the police

    After confirming your car isn’t where you left it and hasn’t been towed, report the theft to the police.

    The police will ask you when and where it was stolen and the make, model, year, colour, registration number and vehicle identification number. They’ll then give you a reference number, which you’ll need to pass on to us.

  2. Contact us

    Assuming your insurance policy covers theft, contact us to report the incident.

    (If you owe money on the vehicle, contact your finance company too.)

  3. Make a claim

    You may decide to hire a car while we process your claim. If we accept your claim, we’ll reimburse you for up to two weeks’ of hire-car costs.

    If your vehicle is not found, we’ll pay you for the value for which your car is covered.

    If it’s found and is damaged, we’ll either pay for it to be repaired or write it off and pay you the value for which your car is covered.

How does the repairs process work?

After you’d lodged your claim, we’ll assess the extent of the damage to your vehicle to determine whether it’s economical to repair or a total loss (i.e. a write-off).

We have seven assessment centres in Sydney, Melbourne and Brisbane. If there isn’t one near you, you can get the assessment done by one of our partner repairers; or a repairer you nominate (and we agree to).

If your car is repairable, we can appoint a repairer and manage the entire process on your behalf.

Alternatively, you can nominate your own repairer, in which case you would need to provide us with a quotation for the repair.

If the quotation is not competitive or we have doubts about the likely quality of the repair, we may decide to:

  • have your car repaired by a different repairer chosen by us
  • pay you what we believe is the reasonable cost of a satisfactory repair.


Before carrying out repairs, you must get our written authorisation (except for essential repairs of up to $500 to make the vehicle driveable following an accident).

How quickly can I expect the repairs to my car to be completed?

Each repair job is unique, so it’s difficult to say for certain how long each job will take. Some can take a few days, others up to two weeks or more, depending on the severity of the damage.

Your assessor or repairer will give you an estimate of how long the job is likely to take and keep you informed of progress.

Do you guarantee the car repairs?

Yes. Repairs authorised by us are guaranteed for as long as you own the car. This guarantee covers the spare parts and workmanship.

My car is a total loss, or write-off – what happens now?

If we decide your vehicle is a write-off, we’ll negotiate with you to either:

  • pay you the value for which your car is covered
  • offer you a new car replacement, if you purchased the car new or as a demo model and it becomes a total loss within:
    • one year or 20,000km of the original registration (Comprehensive Car Insurance Policy)
    • two years or 40,000km of the original registration (Gold Comprehensive Car Insurance Policy).


If you owe money on the car, we are obligated to pay the settlement to your finance company.

We’ll arrange and pay for your written-off vehicle to be towed away from the repair shop and disposed of.

Will I be given a hire car to drive while my vehicle is being repaired; or replaced?

If you’re a Comprehensive Car Insurance policyholder and your car is stolen, you may decide to hire a car while we process your claim. If we accept your claim, we’ll reimburse you for up to two weeks’ of hire-car costs.

This benefit does not apply if your vehicle is nvolved in an accident, however for just over $1 a week, you can add this benefit to your policy.

What is a no-claims discount?

A no-claims discount (NCD) is a discount you receive on your Comprehensive Car Insurance premium for every year you go without making a claim. (It’s also known as a no-claims bonus.)

The more years you remain claim-free, the lower your premium. The discount is typically capped at a certain number of years or a percentage of your premium.

What happens to my NCD if I make a claim?

Each time you make a claim, your NCD will be reduced by two years on renewal of your policy, unless:

  • the accident was not your fault
  • the damage was caused by bad weather
  • your claim is for window glass only.


Is there a way I can make a claim without affecting my NCD?

Yes. For an extra cost, you can get NCD protection, which allows you to make a specified number of claims without affecting your NCD.

To qualify, you must hold your policy for two years continuously with NCD protection without making a claim.

Thereafter, you’ll be able to make one claim per year or two claims in a three-year period without affecting your NCD.

NCD rating

The NCD is capped at 5+ years of claim-free driving.

When you reach this maximum, you’ll be given a Rating 1 (ratings start at 6 and decrease for every consecutive year you don’t make a claim; the lower your rating, the higher your discount).

If ‘Rating 1 for Life’ is shown on your insurance certificate, you’ll keep your maximum discount for life – as long as you continue to take out NCD protection.

It should be noted that, if you have an accident, we’ll reassess your risk premium, regardless of your NCD history.

So while you may not lose your NCD, the discount may apply to an increased premium reflective of the higher risk rating.

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