What are the different types of car insurance?

Budget Direct offers three types of car insurance cover:

  • Comprehensive Car Insurance covers loss or damage to your car due to an accident (regardless of who’s at fault), severe weather, fire, vandalism, and theft; and your liability for accidental damage your car causes to other people’s property (e.g. their car and home).
  • Third Party Property Only Car Insurance covers your liability for accidental damage your car causes to other people’s property (e.g. their car and home). It does not cover damage to your car (unless it’s damaged in a no-fault accident with an uninsured driver, in which case your car has limited cover).
  • Third Party Property, Fire and Theft Car Insurance provides the same protection as Third Party Property Only, plus cover for loss or damage to your car if it’s stolen or catches fire.

The type of cover you have is shown on your car insurance certificate and in your online account.

Compare Budget Direct car insurance

At a glance

Type of insurance

Damage to your car

Damage to other people’s property

Theft of your car

Comprehensive

Yes

Yes

Yes

Third Party Property

At-fault uninsured driver only

Yes

No

Third Party, Fire and Theft

Fire, theft, and at-fault uninsured driver only

Yes

Yes

Which insurance covers loss or damage to my car?

Our comprehensive car insurance policy covers loss or damage to your car due to an accident (regardless of who’s at fault), severe weather, fire, vandalism, and theft.

Which insurance covers damage to someone else's car?

Our comprehensive and third party property policies all cover your liability for accidental damage your car causes to other people’s property (e.g. their car and home).

Is comprehensive car insurance mandatory?

No – there is only one type of car insurance in Australian that is mandatory, namely compulsory third party (CTP) insurance. 

All the other types of car insurance are voluntary, including comprehensive cover.

Though comprehensive car insurance is technically voluntary, if you finance or lease a car, the lender or lessor will likely require to you take out comprehensive cover.

Which car insurance provides the most protection?

Of Budget Direct’s three types of motor-vehicle cover, our comprehensive car insurance, as its name suggests, provides the most protection.

It covers not only your liability for the damage your car causes to other people’s property, including their vehicles, but also damage to your car

Is it worth having fully comprehensive insurance on an old car?

Your decision on whether to comprehensively insure your old car will generally depend on:

  • its market value; and 
  • your ability to cover the financial loss on your own if your car was, say, written off in an accident.

If your car has a low market value (e.g. $2,500), you may decide third party car insurance is all you need.

In other words, you may decide it’s not worth paying more for comprehensive car insurance as, over time, it could outweigh the cost of replacing your cheap car.

It’s up to you to do the maths: Figure out whether the lower protection and cheaper premium are a reasonable trade-off in your circumstances.

What would be the point in having third party property insurance, which does not cover damage to my car due to collision?

If your car has a low market value, you may decide that third party property cover is adequate.

In other words, you may decide it’s not worth paying a higher premium for comprehensive car insurance as, over time, it could outweigh the cost of replacing your car if it was damaged in an accident.

Also, although third party property insurance does not cover damage to your car, it does cover your liability for damage your car causes to other people’s property, saving you having to pay their potentially expensive repair bills.

Note that Budget Direct third party property insurance does provide limited cover – up to your car’s market value or $5,000, whichever is the lesser – for damage caused to your car by an uninsured driver.

No – that level of protection is provided by comprehensive car insurance.

What car insurance do I need for business use or work?

Budget Direct insures cars used for business or work, excluding those used for:

  • carrying passengers for payment, including taxis and/or ridesharing (e.g. Uber, Didi) 
  • carrying or delivering other people’s goods for payment, whether as a contractor or otherwise (e.g. parcel or food delivery) 
  • driving tuition for payment 
  • unpaid driving tuition of a person who is: 
    • excluded on the insurance certificate by name or age; or 
    • a household member that is not listed on the insurance certificate 
  • hiring the car to other people.

If your business use is not excluded, you can choose one of three types of car insurance.

When getting a quote and buying cover, you must select either ‘Private and Occasional Business Use’ or ‘Private and Business Use’ as the permitted use.

In addition, you must give us the details of all the drivers who will use the car for business purposes. 

(If you use your car only to commute to and from your regular place of work, you will need to select ‘Private and Commuting Use’.)

What car insurance do I need if I’m leasing the car?

If you’ve decided to lease a car instead of buy one, the lessor may be able to arrange your insurance for you or you can choose your own provider.

Either way, the lessor will likely require you to take out comprehensive car insurance on the leased car.

It’s important to note that the market value of new cars depreciates quickly in the first few years. 

Consequently, if your leased car is stolen or written off in an accident, the amount an insurance company pays you may be less than the amount you still owe the lessor.

For this reason, you may wish to buy additional ‘gap insurance’ through the lessor, which is designed to cover the shortfall. 

(This is assuming the lessor has not already included the cost of this cover in your lease payments.) 

If you choose Budget Direct Comprehensive Car Insurance, you’ll have to let us know who the lessor is.

Does my cover include a new-car replacement?

What car insurance do I need for food deliveries?

While many general insurers in Australia provide cover for cars used for business, some insurers — like Budget Direct — do not cover certain uses.

These disallowed uses include carrying or delivering other people’s goods for payment (e.g. food-delivery services like Uber Eats, Deliveroo, Menulog, Eat Now, and Oz Foodhunter).

This is regardless of whether you use your car as a contractor, employee or as part of some other remuneration arrangement.  

If you can’t find suitable business-use car insurance, you might have to take out commercial motor vehicle insurance instead. 

You may wish to start your search by visiting the Insurance Council of Australia’s Find an Insurer website.

What car insurance do I need for parcel deliveries?

While general insurers in Australia do cover cars used for business, some insurers — like Budget Direct — do not cover certain uses.

These disallowed uses include carrying or delivering other people’s goods for payment (e.g. parcel-delivery services like Australia Post, Zoom2u, Blu Couriers, and Go People).

This is regardless of whether you use your car as a contractor, employee or as part of some other remuneration arrangement.  

If you can’t find suitable business-use car insurance, you might have to take out commercial motor vehicle insurance instead. 

You may wish to start your search by visiting the Insurance Council of Australia’s Find an Insurer website.

What car insurance do I need as a carer?

If you’re a full-time, part-time or casual paid carer who uses their own car to provide home and community services, Budget Direct will insure it. 

If you’re a voluntary carer, we’ll cover your car provided you do not profit from the service.

If you’re eligible, you can choose one of three types of car insurance.

Get a car insurance quote online