P-plater Car Insurance

Just got your Ps? Before you drive your mates 'round to Maccas, make sure you're covered for everything from car park prangs to theft, with a car insurance policy for P-platers.

All drivers in Australia need compulsory third-party (CTP) insurance at the minimum. As a P-plater, you can be a listed driver on your parents' policy if you mainly drive the family car.

P-platers don't need their own car insurance policy if they mainly drive their parents' car. In fact, they can often be added to their parents' policy as a listed driver.

RELATED: How do I add another driver to my car insurance policy?

However, this could make the policy more expensive, especially if they're a younger driver, under 25. This is because younger drivers are statistically riskier on the roads, which insurance providers factor in to the cost. 

For P-platers with their own set of wheels, you've got a few car insurance options to consider:

P-platers must have CTP insurance at the minimum – it's a legal requirement in all states and territories of Australia. It's also often the most basic car insurance option, and usually cheaper than third-party property and comprehensive car insurance because of that. 

Compulsory third party cover (CTP)

CTP is the minimum insurance cover you need to legally drive in Australia.

CTP covers drivers financially if they cause physical injuries or death to a third party – pedestrians, passengers, other drivers, and motorcyclists. 

This type of insurance essentially pays for their care and medical treatment, damages, and for any loss of income they experience, so you don't have to front up the costs of their compensation. 

However, it doesn't cover damage done to other people's vehicles if you're at-fault in an accident. For that, there's third-party property.

Third party property (TPP)

Third party property (TPP) car insurance can cover the cost of repairing damage to other cars involved in an accident. Just keep in mind, the amount of money your TPP insurance may pay out can differ and might not cover the total amount you're liable for.

However, damage to your own vehicle if you're at-fault in an accident still isn't covered by this level of car insurance. For that, you'll want to look towards comprehensive car insurance. 

Comprehensive car insurance

Comprehensive car insurance is the top level of cover you can get. It covers your car for a range of incidents, regardless of who's at-fault, which may include:

• Accidental damage
• New car replacement 
• Fire, storm, hail and flood damage 
• Theft of car or personal property 
• and more. 

Typically, you'll be able to add optional extras to your comprehensive car insurance policy, like: 

• Windscreen replacement
• Hire car after theft or an accident 
• Roadside assistance. 

Mozo compares some of the latest comprehensive car insurance deals on the market, so if you’re thinking about getting a broader range of cover, use our comprehensive car insurance comparison tool.

P-plater car insurance, if you’re under 25, is typically more expensive because car insurance providers take into account the amount of driving experience you’ve had when determining the cost of your premium. 

Statistically, younger drivers are more likely to have accidents, and therefore more likely to make a claim. So, this is factored into your policy’s pricing.

While it’s possible to get a cheap car insurance deal while you’re on your Ps, it may be harder to drive down your premium, depending on a few different factors.

The Mozo Car Insurance Report 2023 found factors like your age and where you live, or your car's make and model can impact how much your policy costs.

But it’s not always about price! Sometimes the best P-plater insurance for you won’t be the cheapest. You need to balance out the cost of car insurance with the value you get from it.

Aside from your age and driving experience, there are a number of factors that determine the cost of your car insurance policy, they include:

• Your gender – Male drivers statistically have more accidents than female drivers, so they may pay higher premiums.
• Where you live – If your suburb has a high rate of car theft.
• Where you keep your car – Either locked in the garage or on the street.
• How often you drive your car – Some insurance policies are based on how much you drive, whether you drive during peak hours or use your car for business.
• Your driving habits – P1 drivers (red Ps) can receive up to four demerit points, while P2 drivers (green Ps) have a limit of 7s even. If your licence is ever suspended, it may impact the price of your premium.
• The type of car you own – While a more expensive car will obviously be more expensive to insure, the cost of repairs and replacements, its age, size and weight will also be a factor. Whether you drive a Mazda or a Mercedes-Benz may also have some bearing on what you pay.

If you are thinking of taking out comprehensive car insurance on your Ps, there are a number of terms you'll need to become familiar with and keep in mind when choosing a policy, like:

• Sum insured – This is the total amount you are covered for and can be determined two ways: agreed value or market value. Agreed value refers to the amount you would be paid if your car was stolen or deemed a ‘write off’ and is agreed on with your provider. Market value is the amount your car would fetch on an open market.  
• Excess – This is the amount you would pay if you ever need to make a claim, so you’ll need to ask yourself if your quoted excess amount is something you can afford, particularly as many young drivers’ excess amounts can be in the thousands. It also might be worth picking a policy that allows you to adjust your excess to help lower your premium.
• Extra features – This could include things like emergency repairs, cover for personal items in the car, or towing costs.
• Cost of cover – When it comes to insurance, you don’t have to take the first policy you see. Shop around and obtain at least three quotes to help decide which insurance companies offer the best value.

You should already know that driving under the influence of drugs or alcohol is forbidden for P-platers, while fully licensed drivers can have a blood alcohol level under 0.05%. P-platers also have to abide by specific road rules until they receive their full licence, so if you have an accident, your claim may be rejected if you were caught doing the following:

• Exceeding the permitted speed limit
• Misleading your provider about the type of car you drive (P-platers are not allowed to drive high-powered cars)
• Using your mobile while driving, including hands-free
• Carrying passengers under 21 during restricted times, which for a P1 driver is between 11pm and 5am
• Supervising a learner driver.

One of the great things about car insurance is that you can pay your policy on a schedule that suits your budget best! An even better fact is that some insurance companies will offer a discount if you choose to pay your policy for the year in one lump sum. But if you prefer to pay your policy in instalments, many will give you the option to pay your policy on a monthly or quarterly basis.

It can be tempting to save on your car insurance when you’re on your Ps by putting your parents name on the policy instead of your own – this is called ‘fronting’.

If you choose to do this, you run the risk of having a claim rejected. So, be warned that you might be up for a hefty bill if you’re caught being misleading.

Once you start your search for a P-plater car insurance policy, you’ll notice a range of available discounts. And while some of these discounts may not kick in until the future, they’re still worth knowing about.

• Online discounts – Some providers will offer discounts of up to 20%, just for signing up online!
• Loyalty discounts – This means receiving a discount for being a loyal customer with your company. These usually start within 3-4 years of having a car insurance policy.
• Bundled policy discount – If you’ve moved out of home, you are often able to bundle your home and contents insurance with your car insurance to receive a discount.
• No-claims bonus – To score this discount, you’ll need to keep a clean driving record and have no claims on your policy.

As a P-plater you’ll also need to watch out for potential car insurance traps, like:

• Under or over-insuring your car – If you’re planning to drive a second-hand car, it probably doesn’t need to be insured for the same amount as a brand new one. But you don’t want to scrimp on insurance for an expensive car, either, especially if you’ve taken out a car loan. You don’t want to be in a situation of paying for a car you can’t drive because you can’t afford to get it fixed or worse, no longer have it.
• Picking car dealer insurance – Try to avoid picking up car insurance at the dealership until you’ve had time to shop around on policies, as their offer might not be the most competitive on the market and could come with higher fees.
• Not listing all drivers – Planning on sharing your car with a sibling? Remember to list them in your policy, as you may have to pay a hefty undeclared driver excess or not receive cover at all for an accident they caused.
• Unapproved car modifications – Before you upgrade your wheels, it’ll need to be approved by your insurance provider. Otherwise, any claim you make in the future could be rejected.

Now that you know what you’re looking for, it’s time to start comparing car insurance policies, to see if you can find yourself the coverage you need. Happy driving!