A simple guide to choosing the right car insurance in Australia

Understanding your car insurance policy could be the difference between you left with unexpected costs or stress in the unfortunate event of an accident or claim. Deciphering the jargon and comparing policies can be tough, leaving many drivers unsure if they truly have the right cover. What’s the difference between agreed and market value? Do you really need all those optional extras? And what on earth is ‘choice of repairer’?

At Leondis Automotive, we believe in empowering drivers with knowledge, not just on the road but off it too. While we’re experts in what happens under the bonnet, we also know how important it is to have the right protection in place for when things go wrong. So, let’s break down the key things every Australian driver needs to know to choose a car insurance policy with confidence.

The main levels of car insurance cover

First, let’s quickly cover the basics. In Australia, car insurance generally falls into three categories:

Compulsory Third Party (CTP):

This is the one you must have to register your vehicle in NSW. It covers your liability for injuries or death caused to other people in an accident, but it does not cover any damage to vehicles or property (yours or theirs).

Third Party Property Damage:

This next level up covers you for damage you cause to someone else’s car or property. Some policies might offer limited cover for your own car if you’re hit by an uninsured driver, but generally, your vehicle isn’t covered.

Comprehensive:

This is the highest level of cover. It includes everything from Third Party Property Damage, plus cover for your own car against accidents, theft, fire, and other events. The rest of our guide will focus on the options within a comprehensive policy.

Agreed value vs. market value: The big money question

If your car is written off, this single choice determines how much money your insurer will pay you. It’s one of the most important decisions you’ll make.

Market value

This is the value of your car as determined by the insurer right before the time of the accident. They’ll look at its age, make, model, condition, and kilometres travelled to calculate a figure. While this option often results in a lower premium, the payout amount can be unpredictable and may often be less than you expect.

Agreed value

With this option, you and your insurer agree on a specific dollar amount for your car when you take out or renew the policy. This amount is locked in for the 12-month term of the policy. While it might lead to a slightly higher premium, it provides complete certainty. You know exactly what your payout will be if the worst happens.

Which is right for you?

If you have a classic, rare, or highly modified car, or you simply want peace of mind, agreed value is often the better choice. For older, more common cars, market value can be a cost-effective option.

The power of ‘Choice of Repairer’ and why it matters

When you lodge a claim, some insurers will direct you to one of their ‘preferred’ or ‘partner’ repairers. However, many policies offer an optional extra called ‘Choice of Repairer’.

This is a crucial feature for anyone who has a panel beater they know and trust.

Having ‘Choice of Repairer’ on your policy means that if you’re in an accident, you get to decide where your car is taken for repairs. You can bring it straight to a body shop you rely on, where you know the panel beaters, trust the quality of the workmanship, and are confident they’ll use the right parts to repair your vehicle. It puts the control back in your hands, ensuring your car is repaired to a standard you’re comfortable with, not just one chosen by your insurer.

Tailoring your policy with optional extras

Most comprehensive policies can be customised with add-ons to suit your needs. Common options include:

Rental car after an accident

Provides you with a hire car to use while yours is being repaired.

Windscreen and window glass cover

Allows you to repair or replace a damaged windscreen, often without paying your full excess.

No Claim Bonus (NCB) protection

Lets you make one or two claims within a certain period without affecting your no-claim discount rating.

Think about your personal circumstances. If you rely on your car for work, a rental car might be essential. If you drive on motorways a lot, windscreen cover could save you a headache.

Who is insuring your car? Understanding underwriters

Ever felt a sense of déjà vu while comparing car insurance quotes? You’re not imagining it. While Australia has dozens of different insurance brands competing for your business, many of them are owned and operated by just a few large parent companies known as underwriters. The underwriter is the company that assesses the financial risk, sets the premiums, and ultimately pays the claims. Knowing who sits behind the brand you’re looking at can help you be a smarter shopper.

The two biggest players in the Australian market are IAG and Suncorp, with Auto & General also underwriting a huge number of well-known brands. Here’s a quick breakdown of who owns who:

Insurance Australia Group (IAG)

This is the powerhouse behind some of Australia’s most recognised brands, including NRMA Insurance, CGU, SGIO (in WA), SGIC (in SA), and WFI.

Suncorp Group

The other major force in the market, Suncorp owns brands like AAMI, GIO, Apia, Bingle, and the enthusiast favourite, Shannons.

Auto & General

This group provides the insurance for many household names, including Budget Direct, Australia Post, Qantas Car Insurance, and Virgin Money Car Insurance.

Allianz and QBE

These global giants also have a significant presence in Australia, primarily operating under their own well-known brand names but also underwriting for other partners.

When you’re comparing policies, you might find you’re just choosing between two different shopfronts owned by the same parent company. This knowledge helps you see the bigger picture and make a truly informed decision about who you trust to protect your vehicle.