min read
· Posted on
February 21, 2024

What are the different types of insurance?

There are sooooo many types of insurance that it can be hard to keep track… Let’s get clear on the main types.

What's the key learning?

What do broken body parts, damaged moustaches and alien abductions have in common? You can insure against all of them.

Merv’s moustache was insured for around $370,000 (true story!)

Yep, there are some VERY random things you can insure. While it may be for everyone, let’s run through some of the more common types of insurance.

1. Car insurance

We all know car insurance…because it’s likely we’ve had to use it at some point. It can cover repairs or damage to your car… or other people’s cars. And can really help soften the blow when something goes wrong and you need your main mode of transport back in working order fast. 

What people sometimes forget is that there’s a certain type of car insurance that’s compulsory in Oz. It’s called compulsory third party (CTP) and it kicks in if you damage someone else’s car.

Oops.. not that type of damage.

2. Home and/or contents insurance

No points for guessing what this one covers. This insurance covers your house AND all the stuff in it! 

If you’re renting, you’ll only need the contents part. That’s because your landlord will be responsible for actually insuring the house or building itself. You can choose to insure a specific sum (say $100k or $1 million) or total replacement which would cover your home to the same standard as it is today.

3. Private health insurance

Yeah, we’ve got Medicare in Australia and it’s pretty darn great. But many people opt in to private health insurance to help cover the costs of medical care and hospital visits that ain’t covered by medicare. It also gives you a bit more choice about where you’re treated, and by who.

4. Income protection insurance

What happens if you suddenly can’t work for a while ‘cos of a nasty injury or illness? How would you pay your rent or mortgage? That’s where income protection insurance comes in. This baby covers a portion of your income at times like these.

5. TPD insurance

Hopefully none of us will ever need this type of insurance, but it’s there for the ‘just in case’. TDP stands for ‘total and permanent disability’, so this type of insurance pays a lump sum if you become permanently disabled in a way that stops you from working.

6. Life insurance

The name really tells the whole story for this one. If you have life insurance and die unexpectedly, your loved one(s) will receive a lump sum payment to help minimise the financial shock. This type of insurance is often available through your super account.

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