Insurance expert answers your silliest car insurance questions

For all vehicles in Australia, car insurance is a necessary expense. But not every driver is an insurance expert, and not every product disclosure statement is a good read. These vital documents can be riddled with weird T&Cs and jargon, which has led to much confusion (and amusement) online. 

So for sheer enlightenment, here are the silliest, most awkwardly-phrased car insurance questions put to Google – seriously answered by an insurance expert.

Car insurance is a financial agreement you buy from an insurance provider. Essentially, it says you may get reimbursement for eligible events, such as car accidents, theft, or extreme weather. If you take damage and incur repair costs, your car insurance may step in to help ‘cover’ the expenses. 

Or, in Google Caveman Language: Crash expensive. Car insurance may help. But customer must buy policy. Much T&Cs. Read PDS.

Yes, your car insurance premium includes GST. According to the Australian Treasury, all insurance products are fully taxable at the Australian GST rate of 10%.

All vehicles driven in Australia must have compulsory third-party insurance as a minimum level of coverage, so car insurance is not just worth it: it’s mandatory. 

Drivers exhausted with spending so much money on their car insurance policies, however, may wonder whether different levels of coverage are worth it. 

Car insurance is generally broken down into three tiers:

• Compulsory third-party (CTP) insurance, sometimes called a ‘greenslip’
• Third-party accident insurance
• Comprehensive car insurance

Other kinds of coverage, such as Pay As You Go car insurance, are also available. 

Different policies will suit the needs of different drivers. The best car insurance will offer you a good compromise between value and coverage, since even a cheap car insurance policy isn’t worth the money if the coverage isn’t enough for you. 

Different drivers receive different premiums, however, because every driver has a different risk profile. Depending on your situation, your premium may be cheaper or more expensive than someone else on the same policy with the same provider. 

A great way to find a car insurance policy that feels worth it is getting as many car insurance quotes as possible, so you know the price range and coverage available to you. 

Most comprehensive car insurance policies will cover theft. Some terms and conditions may apply, however, and you must provide a police report as a minimum when filing a car insurance claim for theft. Details on what is included or excluded in your car insurance policy can be found in the PDS.

Probably not. Comprehensive car insurance policies in Australia usually don’t cover animal damage because most animal damage, such as from rodents, possums, or rats, results from negligence, poor hygiene, or poor maintenance – none of which is covered by any insurance because it’s too financially risky for the provider. They don’t want to reward bad behaviour. 

However, if rats have gotten into your car and damaged it, it’s still important to take your car to a mechanic – even if your car insurance doesn’t cover the repairs. While it sucks to cop an expense, it’s better to stay on top of your car maintenance. Otherwise, any future accidents caused by your damaged vehicle may not be covered by your car insurance, either.

A car insurance policy can be under someone else’s name, though whether a provider allows this will depend on the policy. Regular drivers of a vehicle must be added to the policy regardless of whether or not they pay for it in order to receive coverage. 

Young drivers especially may benefit from their car insurance policy being primarily under someone else’s name, such as their parent’s, since young drivers often cop higher premiums. (Parents, be warned: adding your teen to your policy will increase your premium. Sorry).

Depends. Car insurance doesn’t come with the vehicle when you buy it: you must sign up for a policy yourself. 

If you aren’t sure whether you’re covered, check your expenses. Are you paying for a policy? Is someone you know, like your parent or partner, paying for a policy for you? If not, it’s vital to get CTP insurance as a standard level of cover for your car. Without it, you break the law driving an uninsured vehicle.

Depends. Some car insurance companies may have offices open on the weekends if you want to visit in person and receive specialist advice. However, most (if not all) car insurance providers in Australia will have online services available 24/7. 

Many policies even have special discounts for customers who sign up online, so it’s worth looking at a provider’s website when comparing car insurance options.

Most car insurance quotes are free, though if you aren’t sure, you can check the terms and conditions of the quote before signing up. If a quote isn’t marketed as a ‘free quote’, it’s worth double-checking, just in case.

And if the quote isn’t free, consider that a free car insurance red flag.

If you use your vehicle exclusively for business or work purposes, you might be able to claim car insurance premiums as a tax deduction.

The Australian Tax Office has specific rules about tax write-offs for insurance, however, so always consult a tax professional before lodging your tax return.

Last year, Mozo’s car insurance report found that car insurance premiums actually decrease with age. Young drivers (under 20) averaged $2,365 annually, while old drivers (over 70) averaged just $818. 

Young drivers tend to be risky drivers due to inexperience. Old drivers also benefit from having longer records of safe, accident-free driving. However, how safe someone is on the road still depends on the individual, so if you can demonstrate that you are a low-risk driver to your insurance provider, they may bring down your premium.

Car insurance isn’t considered a utility bill. Utility bills are household expenses such as electricity, gas, and water. Broadband plans can sometimes be considered a utility bill these days, too, given how common and necessary internet access has become.

However, since not every household has a car, insurance premiums aren’t considered a household expense. 

If you’re wondering whether you can include car insurance costs on your taxes, consult a financial planner or tax professional. (Though most likely, the answer is no).

Compare comprehensive car insurance policies in the table below.