Buyers have flocked to EVs and hybrid cars, including PHEVs, in the first half of 2026, seeking out SUV bargains from affordable Chinese brands like BYD and Chery as Toyota, Ford and others have struggled. Here’s a full wrap on Australian new vehicle sales.
Car Insurance
Car insurance in Victoria: What drivers need to know
Familiarise yourself on the basics of car insurance in Victoria, from types of cover and costs to choosing a policy and making a claim.
Cars can mean different things to different people. For some they're simply a convenient means of transportation, but for others they're an essential work tool or even a much-loved past time. But for nearly everyone who owns a motor vehicle, their car is likely one of their most important financial assets and one that can benefit from being protected.
There is plenty to cover when talking about car insurance, but let's start with the basics of what exactly is car insurance and is car insurance compulsory in Australia? There are several different types of car insurance to consider, including comprehensive car insurance, third party damage car insurance, and third party fire and theft insurance.
Unsure what that all means? We've already compared those insurance types for you and put together a guide on how to choose the right type of car insurance for you. You can also find out more about how much you can expect car insurance to cost, what terms like 'agreed' and 'market' value mean, and what to do in the event you need to make a claim.
Understanding car insurance
What is car insurance?
Car insurance can seem daunting, but the basics are easier to understand than you might think. Learning about the different types of cover, what’s mandatory, the costs and terminology can help set you up to make informed choices about protecting one of your biggest financial assets.
Read on to find out more in RACV’s beginner's guide to car insurance.
Is car insurance compulsory in Australia?
A specific type of car insurance, known as Compulsory Third Party (CTP) car insurance, is mandatory for all vehicles registered in Australia. While this insurance is compulsory nationwide, how it’s provided and purchased varies between different states and territories.
Discover what car insurance is compulsory in Australia and how you pay for it in Victoria.
Types of car insurance explained
Comprehensive car insurance
Comprehensive car insurance is a popular choice because it can cover your car against a broad range of insured events. However, it’s important to understand what the policy does and doesn’t cover before deciding whether it’s right for you and your vehicle.
Learn about the benefits of comprehensive car insurance and what it can include.
Third Party Property Damage, and Third Party Fire and Theft
Other car insurance options include third party property damage insurance, and third party fire and theft insurance. While they don’t provide coverage for as many insured events as comprehensive car insurance, some motorists find these types of car insurance a good fit for their needs.
Discover more about third party property damage, and third party fire and theft car insurance and if either option is right for you.
Compare comprehensive car insurance versus third party car insurance
Can’t decide whether comprehensive, third party property damage, or third party fire and theft insurance is the best option for insuring your vehicle? We’ve laid out the pros and cons of each of these types of car insurance in a way that’s easier to understand.
Compare the different types of motor insurance available to help work out which is best for your circumstances.
Car insurance costs and value explained
How much does car insurance cost?
Cost is a major consideration when weighing up different motor insurance policies. But remember that it’s important to weigh up not just the upfront cost – i.e. your premium – but also your excess amount.
Learn about how much different types of car insurance can cost, plus how to help reduce your premiums.
Agreed vs market value explained
When organising a motor insurance policy you’ll likely be asked whether you want your vehicle insured for the ‘agreed’ or ‘market’ value. Knowing the difference between the two is one of the most fundamental things to understand about your car insurance policy, as they can affect your financial situation should your vehicle be written off or stolen.
Find out exactly what is meant by ‘agreed’ or ‘market’ value when talking about car insurance.
How to choose the right car insurance policy
There are multiple factors to consider when deciding on a car insurance policy, from the age and value of your car, to your day-to-day driving habits. Considering all these factors can help ensure you’re choosing a policy that will best support you when you need it most.
Find out more about what to consider when choosing a car insurance policy.
Read more: Why choose RACV Car Insurance?
Car insurance claims and what to do after an incident
How to make a car insurance claim
There are many circumstances that can lead to you lodging a car insurance claim and the experience isn’t always intuitive to first-time claimants. Understanding the steps, as well as what information you'll need to provide, can help ease some of the burden at what is often an already stressful time.
Here's what you need to know about making a car insurance claim.
Frequently Asked Questions
Victorian motor vehicle registration includes compulsory third party (CTP) insurance. When you register or renew your vehicle registration, part of the fee pays for the Transport Accident Charge, which funds Victoria’s CTP scheme. Cover is provided by the Transport Accident Commission (TAC).
This insurance is different from third party damage, and third party fire and theft policies obtained through insurance companies.
Compulsory third party (CTP) insurance is different from third party damage, and third party fire and theft insurance policies obtained through commercial insurance companies.
CTP insurance covers your legal liability if you cause injury or death to other road users, including drivers, passengers, pedestrians and bike riders. It is mandatory in Victoria.
Third party damage insurance policies provide coverage should your vehicle damage another person's vehicle or property. Third party fire and theft insurance generally includes this cover, as well as cover for damage to your vehicle caused by fire or theft. These policies are optional and you should always read the product disclosure statement before purchasing a policy.
It is not mandatory to hold a third party damage or third party fire and theft car insurance policy in Victoria. The only car insurance that is mandatory is compulsory third party insurance, which in Victoria is paid when you register or renew the registration of your vehicle.
Comprehensive car insurance can help cover a broader range of insured events when compared to third party insurance policies. Consider your individual circumstances when selecting a car insurance policy. Always read the product disclosure statement for the full list of inclusions, conditions, limits and exclusions.
Yes, comprehensive car insurance is not mandatory in Victoria. Your car insurance level depends entirely on your financial risk appetite and your capacity to absorb out-of-pocket losses.
The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product(s) issued by Insurance Manufacturers of Australia Pty Ltd ABN 93 004 208 084 AFS Licence No. 227678.
