Third Party Property Insurance in Australia 2025: What Drivers Need to Know

Every Australian driver knows that accidents happen—sometimes in the blink of an eye. While comprehensive car insurance gets all the attention, third party property insurance is the unsung hero for budget-conscious motorists who still want protection. In 2025, with repair costs and liability risks on the rise, understanding third party property insurance has never been more crucial.

What Is Third Party Property Insurance?

Third party property insurance covers the damage your car causes to other people’s vehicles or property in an accident. Unlike compulsory third party (CTP/green slip) insurance, which only covers injuries to people, third party property doesn’t cover damage to your own car—but it can save you from paying out-of-pocket for someone else’s smashed bumper, fence, or storefront.

• Example: You accidentally reverse into a luxury car at the supermarket. Third party property insurance covers their repairs (often tens of thousands), but not your own panel damage.

• Not covered: Your own car’s repairs, theft, or fire—unless you upgrade to fire & theft or comprehensive.

2025 Updates: What’s Changed?

This year, Australian insurers have responded to two big trends: inflation-driven repair costs and a spike in liability claims involving electric vehicles and e-bikes. Here’s what’s new for 2025:

• Higher standard limits: Most major insurers now offer $20 million in property damage cover as standard, up from $10 million in 2023, reflecting the ballooning cost of luxury vehicle repairs and infrastructure damage.

• Optional uninsured motorist extension: Policies may include (or offer as an add-on) limited cover for your own vehicle if the at-fault party is uninsured—a popular choice for city drivers where hit-and-runs are rising.

• EV and micro-mobility inclusion: Some policies now explicitly cover damage to and caused by electric vehicles, e-bikes, and even scooters, reflecting the changing mix on Australian streets.

• Policy transparency: ASIC’s 2025 guidelines require clearer disclosure of exclusions and claim processes, so you know up front what’s in and out.

Who Needs Third Party Property Insurance?

If you drive any car that’s not your pride and joy—or you simply want to avoid financial ruin after a fender bender—third party property is a smart move. Here’s why:

• Drivers of older or lower-value cars: Comprehensive insurance may not make sense for a $4,000 runabout, but you still risk owing $50,000+ if you hit a luxury vehicle.

• Urban drivers: Denser traffic and more expensive cars increase the risk and potential repair bills.

• Parents with learner drivers: Young or inexperienced drivers are statistically more likely to be involved in accidents.

It’s not legally required in most states (unlike CTP), but the financial consequences of being uninsured are real. In 2025, insurers report that the average third party property claim is now over $9,000—up 15% from 2022.

How to Choose the Right Policy in 2025

Shopping for third party property insurance is about more than just price. Here are some key features to compare:

• Cover limits: Aim for at least $20 million, especially in metro areas.

• Uninsured motorist benefit: This can cover your repairs (up to a limit) if the at-fault driver is uninsured.

• Excess amounts: Make sure the excess is manageable for your budget.

• EV and alternative transport cover: If you drive or park near electric vehicles or e-bikes, check policy inclusions.

• Online claims process: A streamlined claims portal can save you stress if the worst happens.

Major insurers like NRMA, Budget Direct, and Youi have updated their third party property offerings for 2025, with some even offering pay-as-you-drive options for low-kilometre motorists.

Conclusion: A Smart, Affordable Shield for 2025

Third party property insurance remains one of the most cost-effective ways to protect yourself from the financial fallout of an accident. In 2025, it’s smarter, more transparent, and increasingly tailored to the realities of modern Australian roads. Whether you’re driving an old hatchback or a family SUV, now’s the time to review your cover and make sure you’re protected against unexpected repair bills.