Last updated: 16 October 2026 · Reading time: 8 minutes
Third party car insurance is the most basic optional level of car insurance in Australia, and it is often confused with compulsory third party (CTP), which is a different thing. This guide explains what each level covers and what it does not, how the three optional levels compare, and how CTP works in each state and territory. It describes cover in general terms only, because every policy has its own limits and exclusions.
This guide is general information only and does not consider your personal circumstances. Always read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for any policy.
What is third party car insurance?
Third party car insurance is optional cover that pays for damage your car causes to other people's cars and property when you are at fault. It does not pay to repair your own car. Third party property damage is the basic level, and third party fire and theft adds limited cover for your own car.
Moneysmart's choosing car insurance guide (last updated 10 August 2026) says third party property damage cover does not cover damage to your car but covers damage to other people's cars or property caused by your car. The Moneysmart car insurance page says car insurance can cover the cost of repairs to other people's cars, to your own car, or both.
What does third party mean in car insurance?
In car insurance, you are the first party, your insurer is the second party, and anyone else affected by a crash you cause is a third party. Third party cover protects you against the cost of what you owe those other people, such as repairs to their car or property.
The term does not mean the policy is bought from a third party. It describes who is protected by the cover, which is why "third party" cover is generally not designed to pay for your own car.
What does third party property damage insurance cover?
Third party property damage (TPPD) insurance covers the cost of repairing or replacing other people's property that you damage in an accident you are at fault for, most commonly their car. Moneysmart says it does not cover damage to your own car, though some policies let you pay extra for fire and theft cover.
Each policy sets its own limit on how much the insurer will pay for damage to other people's property, so the PDS is the place to check the limit.
What does third party property damage not cover?
Third party property damage does not cover repairs to your own car, including after theft or fire, unless you hold the fire and theft version. Moneysmart says that if you want insurance that covers the cost of repairs to your car after a crash you cause, you usually need comprehensive car insurance.
- Your own car: Moneysmart says third party property damage does not cover damage to your car.
- Theft, fire and weather: these need third party fire and theft (for theft and fire) or comprehensive cover.
- Extras: items such as roadside assistance or a rental car vary by policy and level of cover, so check the PDS.
- Injury to people: this is the role of CTP, covered below.
- Some claims: every policy lists exclusions, including some about how the car was being driven, so check the PDS.
Source: Moneysmart, choosing car insurance guide (last updated 10 August 2026), checked 16 October 2026. Exclusions differ between policies.
What is third party fire and theft insurance?
Third party fire and theft (TPFT) insurance includes the same cover as third party property damage, plus cover if your own car is stolen or damaged by fire, Moneysmart says. It usually does not cover repairs to your car after an accident you caused, and it does not cover injuries to people.
Some policies add benefits after a theft or fire, and some cap the amount paid for your own car, so the limit may not cover a full repair or replacement. Benefits and caps vary by insurer, and the PDS sets out the detail.
What is comprehensive car insurance?
Comprehensive car insurance is the broadest level. Moneysmart says it covers damage to your car and to other people's cars or property, even if you caused the accident, and covers your car if it is stolen or damaged by fire or weather events. It does not cover everything, so check the exclusions.
Moneysmart says that with comprehensive insurance you can choose how your car is valued: an agreed value, a fixed amount decided by you and your insurer, or market value, decided by your insurer based on industry information. Details are in the Moneysmart choosing car insurance guide.
Comprehensive vs third party: how do the levels compare?
The three optional levels differ mainly in what happens to your own car. Third party property covers other people's property only, third party fire and theft adds limited cover for your car if it is stolen or burnt, and comprehensive covers your own car for a wider range of events as well.
| Level | Other people's cars and property | Your own car | Extras |
|---|---|---|---|
| Third party property damage | Covered, up to the policy limit | Not covered, although some policies include limited cover if an identified uninsured driver is at fault | Varies by policy |
| Third party fire and theft | Covered, as for third party property damage | Covered if stolen or damaged by fire, up to the policy limit | Varies by policy |
| Comprehensive | Covered, as for third party property damage | Covered, including damage in an accident you caused, theft, fire and weather events | Varies by policy |
Source: Moneysmart, choosing car insurance guide (last updated 10 August 2026), as at 16 October 2026. None of the three levels covers injury to people, which is the job of CTP. This table describes the usual position, and each policy's PDS sets out its own cover, limits and exclusions.
Does third party insurance cover my car if an uninsured driver hits it?
Some third party property policies include limited cover for your own car if an identified uninsured driver is at fault. Limits and conditions vary by insurer, and the cover is often more limited than under comprehensive. The PDS says whether a policy includes it and what conditions apply, such as whether the other driver must be identified.
Canstar's third party property damage page says you may get cover if your car is damaged by an uninsured driver, and that where the other driver is at fault and insured, their insurer may cover your car if they hold an eligible policy. It points to comprehensive cover as the option that covers your car more broadly. Because policies differ, treat this as something to check in the PDS rather than assume.
What is the difference between CTP and third party property damage insurance?
CTP is compulsory and covers injury or death of other people in a crash, while third party property damage is optional and covers damage to other people's property. They protect against different losses, so having CTP does not mean your car or anyone else's car is covered for damage.
CTP is a state scheme tied to registration, as the state CTP bodies in the table below set out. In some states you choose your CTP insurer at registration, and in others the cover is included in the registration charge. Either way it is not the same as the optional policies in this guide, which you buy from an insurer for property damage. Moneysmart's choosing car insurance guide says CTP covers injuries to people caused by your car and does not cover damage to cars or property.
How does CTP work in each state and territory?
CTP is compulsory in every state and territory and is arranged with your registration. In NSW, Queensland and South Australia you choose your CTP insurer, and in the ACT the premium is paid with registration to a licensed private insurer. In Victoria, Tasmania, Western Australia and the Northern Territory it is included in the registration charge.
| State or territory | Scheme and who oversees it | Do you choose your CTP insurer? |
|---|---|---|
| New South Wales | Green Slip, overseen by the State Insurance Regulatory Authority: SIRA Green Slips | Yes, SIRA's Green Slip Price Check compares insurers' prices |
| Queensland | CTP, regulated by the Motor Accident Insurance Commission | Yes, when you pay registration |
| South Australia | CTP, overseen by the CTP Insurance Regulator | Yes, each time you renew registration |
| Australian Capital Territory | Motor Accident Injuries (MAI) insurance, overseen by the Motor Accident Injuries Commission | Paid with registration to a licensed private MAI insurer |
| Victoria | Transport Accident Commission: TAC | No, the TAC charge is part of registration |
| Tasmania | Motor Accidents Insurance Board: MAIB | No, the MAIB premium is part of registration |
| Western Australia | Motor injury insurance, run by the Insurance Commission of WA | No, paid with your car registration (vehicle licence) |
| Northern Territory | Motor Accidents Compensation (MAC) Scheme, a no fault scheme for people injured in motor vehicle accidents, administered by the TIO for the Motor Accidents Compensation Commission | No, NT registration fees include MAC cover |
Source: the state and territory bodies linked in the table, as at 16 October 2026. Schemes change, so check your state body or registration notice for the current position and the insurers on offer.
What is third party car insurance in NSW, Queensland and WA?
The words mean two things depending on context. The optional third party property cover described above is available in every state. The compulsory scheme is separate and is called a Green Slip in NSW, CTP in Queensland, and motor injury insurance in WA. It covers injury to people, not damage to cars.
In NSW, SIRA runs the Green Slip Price Check for comparing Green Slip prices from insurers. In Queensland, MAIC says CTP is included with vehicle registration and that you can compare CTP insurers before you pay. In Western Australia, the Insurance Commission of WA says motor injury insurance is paid with your car registration (vehicle licence). None of these schemes pays for damage to a car.
Is CTP included in rego in Queensland?
Yes. The Motor Accident Insurance Commission says CTP insurance is included with vehicle registration in Queensland, and you can compare CTP insurers before you pay. CTP covers injury to people. It does not cover vehicle or property damage, which is what optional third party property cover is for.
Source: Motor Accident Insurance Commission, maic.qld.gov.au, checked 16 October 2026.
What car insurance do I need in Australia?
The only car insurance every registered vehicle must have in Australia is CTP, which is arranged with registration. Third party property damage, third party fire and theft and comprehensive are optional. Which of these a person buys, if any, is their own decision. New drivers can read about car insurance for P platers.
Is third party property damage insurance worth it?
That depends on what a person wants covered and what they could afford to pay themselves, so this guide cannot say whether it is worth it. As general information, it protects against the cost of damaging other people's cars and property, which can be large, and it does not pay for your own car.
Moneysmart's car insurance page explains that car insurance can cover other people's cars, your own car, or both, and that policies differ. Reading the PDS shows what a particular policy pays for.
Which is better, third party or comprehensive car insurance?
Neither is better for everyone, because they cover different things. Comprehensive covers other people's property and your own car for more events, so it protects more. Third party property covers only other people's property. The right level depends on the car and what the owner is prepared to pay for out of pocket.
How much does third party car insurance cost?
Price depends on the driver, the car, where it is kept and the insurer. Dated averages and the factors that can move a premium are set out in our guide to dated averages for car insurance in Australia, which covers cost so this guide does not repeat it.
Where can I go from here?
You can line up quotes for the same cover level, excess and car details to see how premiums differ between insurers. Our Insurance Hub and homeowner guide explain how that comparison works. CTP is arranged through your state scheme and is not part of an optional car insurance comparison. See our young driver car insurance guide.
Ready to look at quotes? Our Insurance Hub has a car section that explains how comparison works before you start.
If you would rather read how car cover works around a move first, our guide to comparing car insurance as a homeowner covers it.
This article is general information only and does not consider your personal circumstances. It describes cover in general terms as published by Moneysmart and the state and territory CTP bodies on the dates shown, with one point from Canstar. Cover, exclusions, limits and pricing depend on the specific policy and insurer, so read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) before buying, and verify current details with the insurer and your state body. NestPath is not an insurer, insurance broker or financial adviser.
