Whether you’ve just made the final payment on your car, downgraded to an older runaround, or you’re trying to get cover organised after buying your first set of wheels – changing life circumstances can prompt a car insurance rethink.
Regardless of your situation, if you’ve recently found yourself debating whether to go with comprehensive cover or opt for a third party option instead, you’re not alone.
Case in point: Over the last 12 months to February 2026, 3.2 million Aussies either lowered or cancelled their car insurance policy due to rising premiums and cost of living pressures.1
And while you might feel like you’re completely across the difference between comprehensive and third party car insurance, our 2025 Under the Hood Report shows that only 58% of people have read their car insurance policy’s Product Disclosure Statement in full or in part – and 12% haven’t read it at all.
So how does comprehensive vs third party car insurance compare in reality when it comes to what’s covered or if you need to make a claim? Are third party policies all the same in terms of coverage? And where does Compulsory Third Party (CTP) insurance fit in among it all?
To help you feel more in control if you’re comparing whether comprehensive or third party car insurance is the right choice for you and your car right now, we’ve put together this guide to answer these questions and more.
Comprehensive vs third party car insurance – what’s the difference?
Because they’re technically different types of insurance,2 it all comes down to what they do, and don’t, include.
What does comprehensive car insurance cover?
Policy inclusions and exclusions can vary between insurers, but generally speaking, comprehensive car insurance covers:
- Damage to your car and other people’s cars or property due to an accident2, even if you caused the collision
- Your car if it gets stolen2
- Malicious or intentional damage to your car – for example, vandalism3
- Damage to your car caused by fire2
- Damage to your car caused by weather events, such as hail or a storm.2
What does third party car insurance cover?
Depending on your insurer, there may be more than one type of third party car insurance available. The cover provided will depend on the policy you’re thinking about:2
- Third party fire and theft – This covers your car if it’s stolen or damaged by fire. Plus, if you have a car crash and you’re found to be at fault, it also covers the damage you cause to other people’s cars or property.
- Third party property damage – This doesn’t cover any damage to your car, but it does cover damage to other people’s cars or property caused by your car.2
What about CTP insurance – what does that cover?
Unlike the car insurance types outlined above, CTP insurance covers injuries to people caused by your car; it doesn’t cover damage to cars or property. In Australia, CTP insurance is the only mandatory type of car insurance and you must have it to register your car.2
What does each level of car insurance cover?
It’s one thing to read a list of policy inclusions and exclusions, but understanding how they actually work in response to some real-life scenarios could help highlight the key differences between the levels of cover. Let’s look at some common behind-the-wheel situations:
You hit a pole and damage your car
Even though it doesn’t involve a car crash with another vehicle, this is an example of accidental damage. It’s typically only comprehensive car insurance policies that provide cover for this type of damage to your car.2
You rear-end an expensive SUV
Damage your car causes to someone else’s car or property is usually covered by all levels of car insurance, except CTP insurance, which only covers injuries to people.2 But keep in mind that if you have a third party policy, any damage to your own vehicle generally won’t be covered.
Hail damages your parked car
Only comprehensive car insurance policies tend to include cover for damage to your car caused by severe weather such as hail,2 which can result in car insurance claims for body damage and, in some cases, a smashed windscreen.4
Storms across Queensland and New South Wales resulted in about 40,000 car insurance claims over a 16-day period at the end of 2025.5 Many claims involved the kind of damage mentioned above, but in some cases, they were for total loss car write-offs due to hail damage.5
Your car’s stolen
Both comprehensive and third party fire and theft car insurance policies could help cover the cost of a car replacement if yours is stolen.2
And while Insurance Council of Australia data shows that car theft insurance claims rose by 2.5% nationally in 2025, in some parts of Australia, the risk is much higher, with Victoria having recorded a sobering 25% increase in motor theft claims last year.6
Your car is damaged in an accident caused by someone else and the other driver is uninsured
It’s typically only comprehensive car insurance that will cover collision-related damage to your car, regardless of who was deemed at fault for the accident and whether or not the other driver has insurance.2
“However, if you have a Third Party Fire & Theft or a Third Party Property Only car insurance policy with Youi and you’re involved in an accident where you’re not at fault and where the other driver is uninsured, we’ll cover up to $5,000 of accidental damage to your car, provided you can give us the uninsured driver’s details,” says Marni Jackson, Youi’s Head of Product – Vehicle and Lifestyle.7
Your car breaks down on the side of the road
While repair costs for events such as engine failure or mechanical faults aren’t covered by car insurance,8 some comprehensive car insurance policies offer roadside assistance, either as part of the standard policy or available as an add-on for an extra cost, to help you out when things go wrong on the road.3
“At Youi, Roadside Assist is automatically included with our Comprehensive car insurance and can come to your aid for a range of common events – including a flat battery, flat tyre, stalled engine and more – 24 hours a day, seven days a week,”9 says Jackson.
How to choose the best car insurance for you
While comprehensive car insurance policies provide the most extensive cover and are more popular than third party policies in Australia, they also tend to be more expensive.10
As a result, when you’re trying to establish which level of cover is right for you, including whether comprehensive insurance is worth it for your circumstances, there are a number of questions you might like to consider. For example, could you afford to repair or replace your car without insurance?2
“If you’re unsure, another place to start can simply be by getting accurate quotes for different levels of cover to compare your options and see what might suit your budget as well as your insurance needs,” says Jackson.
“At Youi, we can provide quotes for all three levels of car insurance cover – Comprehensive, Third Party Fire & Theft and Third Party Property Only.
“And because premiums are calculated using a range of factors, including your individual circumstances, comparing quotes can help you weigh up the costs and benefits of each option.”
In addition to the make and model of your car, some of the other factors used to calculate premiums at Youi include:
- Where you live
- Where your car’s parked overnight
- Your age
- Your driving history and experience
- How you use your car
- Whether anyone else regularly drives your car.
You may also be able to reduce your premium by choosing a higher car insurance excess.2
“You can start a quote online or by giving us a call on 13 9684,” says Jackson.
Youi’s car insurance: Comprehensive vs Third Party cover
To help you decide which level of car insurance might be the right choice for you and your current vehicle, here’s a quick snapshot of some of the events that Youi’s policies do and don’t cover.
| Policy inclusion | Comprehensive | Third Party Fire & Theft | Third Party Property Only |
| Youi Roadside Assist | Automatically included9 | Not included | Not included |
| Accidental damage | Covered11 | Not covered* | Not covered* |
| Intentional damage | Covered11 | Not covered | Not covered |
| Storm or flood damage | Covered12 | Not covered | Not covered |
| Fire damage | Covered12 | Covered12 | Not covered |
| Theft | Covered13 | Covered13 | Not covered |
| Legal liability for third party damage | Covered14 | Covered14 | Covered14 |
| Towing costs after an insured event | Covered15 | Covered15 | Not covered |
| Hire car following theft | Covered16 | Covered16 | Not covered |
| Hire car following a not-at-fault accident | Covered11 | Not covered | Not covered |
*Up to $5,000 cover for accidental damage to your car caused by an uninsured driver is covered.7
While there’s no one-size-fits all answer to the “what’s the best car insurance?” question, now that you understand more about the difference between comprehensive and third party car insurance cover, hopefully you feel better placed to decide what’s right for you, and your car, right now.
And, if you’d like to explore whether one of Youi’s car insurance options is a bit more you-shaped, consider starting a quote online or giving us a call on 13 9684.
Car Insurance issued by Youi Pty Ltd. Consider the Car PDS and TMD to decide if this product is right for you.
1 Source: Finder – 3.2 million Australians cut back or go without car insurance as fuel stress soars, April 2026
2 Source: Moneysmart – Choosing car insurance, n.d.
3 Source: Canstar – Comprehensive vs third party car insurance, April 2025
4 Source: Insurance Council of Australia – Hail events push extreme weather costs to $4.8 billion in 2025, April 2026
5 Source: ABC News – Tens of thousands of cars damaged after hailstorms lash Queensland and parts of New South Wales, December 2025
6 Source: Insurance Council of Australia – Victoria still leads Australia’s car crime insurance claims, June 2026
7 Available with Third Party Fire & Theft and Third Party Property Only cover only. Conditions apply. For full details, see the PDS.
8 Source: Canstar – What does car insurance not cover?, January 2025
9 Available with Comprehensive policies only. Exclusions, limits, waiting periods and additional fees may apply. Cover not available within 24 hours of taking out or upgrading to Comprehensive cover. For full details, see the T&Cs.
10 Source: CHOICE – How to find the best car insurance policy, n.d.
11 Available with Comprehensive policies only. Limits and exclusions apply. For full details, see the PDS.
12 Exclusions and limits may apply. Where you have increased your cover or reduced your excess within 72 hours of a flood, storm, hail or bushfire occurring, cover will be limited to the amount that was effective prior to the change. Loss, damage or legal liability caused by, resulting or arising from flood, storm, hail or bushfire during the first 72 hours of your policy first being purchased is excluded unless certain conditions apply. For full details, see the PDS and your policy schedule.
13 Available with Comprehensive and Third Party Fire & Theft policies only. Exclusions apply. For full details, see the PDS.
14 Available with all levels of car insurance except CTP. Limits and exclusions apply. For full details, see the PDS.
15 Available with Comprehensive and Third Party Fire & Theft policies only. Limits apply. For full details, see the PDS.
16 Available with Comprehensive and Third Party Fire & Theft policies only. Limits and exclusions apply. For full details, see the PDS.
