Third Party, Fire and Theft Insurance: 2025 Guide for Australian Drivers

Car insurance is a must for every Australian driver, but not all policies are created equal. For many, comprehensive insurance feels like overkill—especially for older cars or low-value vehicles. That’s where third party, fire and theft insurance (often shortened to TPFT) comes in. This policy type has seen renewed interest in 2025, as the cost of living and insurance premiums continue to rise nationwide. But is it the right fit for you?

What Does Third Party, Fire and Theft Insurance Cover?

Third party, fire and theft insurance is designed to strike a balance between affordability and peace of mind. Here’s what you can expect from a typical TPFT policy in 2025:

• Third party property damage: Covers damage you cause to other people’s vehicles or property in an accident.
• Fire damage: If your car is damaged or destroyed by fire (including bushfire or arson), you’re covered.
• Theft: Provides a payout if your car is stolen or damaged during an attempted theft.

It’s important to note what TPFT doesn’t cover: it won’t pay for damage to your own car from a collision (unless the fire or theft component applies), nor does it cover storm, hail, or flood damage. For those types of risks, comprehensive insurance remains the gold standard.

2025 Policy Trends and Updates

This year, insurers have responded to both regulatory changes and shifting consumer needs. Here are some notable 2025 updates:

• Flexible excess options: Many insurers now let you adjust your excess (the amount you pay when making a claim) to tailor premiums to your budget.
• Expanded fire coverage: After the 2023–24 bushfire season, several providers updated their TPFT policies to include higher sub-limits for fire damage and temporary accommodation if your home is uninhabitable due to car-related fires.
• Telematics discounts: Insurers are increasingly offering discounts for drivers who opt into telematics (usage-based insurance), rewarding safe driving and lower annual mileage.
• Digital claims: The claims process has become smoother, with most major insurers supporting mobile app lodgement and real-time tracking.

According to the Insurance Council of Australia, TPFT policies have grown in popularity among drivers aged 25 and under and among those insuring cars valued under $10,000. With average comprehensive premiums now exceeding $1,400 per year in some metro areas, TPFT’s typical price point—often under $600—makes it an attractive alternative.

Who Should Consider TPFT in 2025?

Third party, fire and theft insurance isn’t right for everyone. Consider this type of cover if:

• You own an older car or a vehicle with a low market value.
• Comprehensive insurance premiums would cost more than 15% of your car’s value annually.
• You park on the street or in areas with moderate risk of theft or fire, but aren’t worried about covering your own accidental damage.
• You want to protect your finances against liability for damaging someone else’s property, but don’t need the bells and whistles of full comprehensive cover.

Example: Jess drives a 2011 Toyota Corolla valued at $7,500. She parks on the street in Melbourne’s inner suburbs. Comprehensive cover quotes exceed $1,300, but TPFT is available for $460. Jess opts for TPFT, knowing she’s covered for major risks but isn’t overpaying for unnecessary extras.

Tips for Getting the Best Value from TPFT

• Compare excess options: A higher excess means lower premiums, but be sure you could afford the out-of-pocket cost if you need to claim.
• Check for exclusions: Some policies exclude theft if you leave your car unlocked, or require specific security measures for fire coverage.
• Bundle for discounts: Some insurers offer multi-policy discounts if you bundle car, home, and contents insurance.
• Review annually: As your car ages or your circumstances change, reassess your insurance needs to avoid overpaying.

Conclusion

Third party, fire and theft insurance is a practical middle ground for many Australian drivers in 2025—especially those with lower-value vehicles who want protection from life’s big, unpredictable events without the high cost of comprehensive cover. As policy options expand and digital features improve, it’s easier than ever to find a TPFT policy that fits your budget and risk profile.