Car insurance around the world: how other countries cover their drivers

This is a platform comparison. General information gathered from public sources — pricing, features and policies change, so check each platform’s own site before deciding. Full note

Every country that puts cars on roads has answered the same two questions: who pays when a person is hurt, and who pays when property is damaged? The answers vary far more than most drivers realise. Some countries make injury cover a private product you must buy; some fold it into taxation; one of our nearest neighbours requires no car insurance at all. Seen from overseas, Australia's habit of hiding compulsory injury cover inside the rego bill turns out to be fairly unusual — and, in a few ways, fairly enviable.

The near-universal global rule: compulsory cover protects other people, not your car. Almost everywhere, cover for your own vehicle is optional — and everywhere, a meaningful share of drivers skips more cover than they should.

United Kingdom: private, priced, and policed

The UK treats motor insurance as a fully private product: third-party cover is the legal minimum, bought from a competitive market, and driving without it is an offence detected largely by camera — the Continuous Insurance Enforcement regime cross-references the national insurance database against registered vehicles, so an uninsured car gets flagged parked in its own driveway. Even so, the Motor Insurers' Bureau — the industry body that compensates victims of uninsured and untraced drivers — has long estimated the number of uninsured drivers on UK roads at around a million.

The UK is also where premiums went vertical: average comprehensive premiums approached the £1,000 mark at the 2023–24 peak in widely-cited industry indices, before easing — driven by repair-cost inflation, parts delays and theft. Young UK drivers routinely face premiums that exceed the value of their first car, which is why telematics "black box" policies took off there earlier than almost anywhere.

United States: fifty schemes, thin minimums

There is no American car insurance system — there are state systems, and they diverge as sharply as their speed limits. Liability insurance is compulsory in nearly every state, but minimums can be strikingly low (limits in the tens of thousands of dollars are common, which a single serious injury can exhaust), and studies by the US Insurance Research Council have put the uninsured-driver share at roughly one in eight nationally, far higher in some states. A dozen-odd states run no-fault schemes where your own insurer pays your injury costs regardless of blame — Michigan's famously generous version produced some of the highest premiums in the country before its 2020 reforms. Full-coverage premiums averaging north of US$2,000 a year have been widely reported in recent years, which makes even a rough comparison with Australian pricing flattering to us.

New Zealand: the country with no compulsory car insurance

New Zealand is the outlier westerners forget: no motor vehicle insurance of any kind is legally required. Injuries are handled by the Accident Compensation Corporation (ACC) — a universal, no-fault national scheme funded partly through fuel levies and licensing fees — which covers crash injuries the way it covers workplace or sporting ones, and which removed the right to sue for personal injury back in the 1970s. Property damage is left to the market: most NZ drivers buy at least third-party cover voluntarily, but surveys have consistently found a meaningful minority drive with none, which is why "uninsured driver" clauses in NZ policies do real work. Australia's NT scheme — no-fault benefits, no lawsuits — is the closest local cousin to the ACC philosophy.

Europe: green cards, bonus-malus and decades of no-claims

The EU harmonises the floor — every member requires third-party motor liability cover, and a policy issued in one member state is valid across the bloc — while the pricing cultures differ wildly. Germany won't register a car without proof of insurance, and its no-claims ladder (the Schadenfreiheitsklassen) stretches over decades of driving, making a clean record a genuinely valuable asset. France runs a legally-regulated bonus-malus coefficient that halves the premium of a long-term clean driver and multiplies an at-fault one's, and in 2024 abolished the windscreen insurance sticker in favour of database checks. The old "green card" — the international proof-of-insurance document — still matters at some non-EU borders, a reminder that insurance recognition is part of what makes borders drivable at all.

Japan and beyond

Japan layers two products: compulsory jibaiseki injury cover, purchased alongside the shaken roadworthiness inspection every two years, plus voluntary insurance that nearly all drivers add because the compulsory layer's payouts are capped. Across much of the developing world, compulsory insurance exists on paper with patchy enforcement — the World Health Organization's road-safety reporting notes that crash victims in many countries depend on family resources rather than any insurance scheme, which puts the whole debate about premium inflation into perspective.

Where Australia fits

Run the comparison and Australia's schemes look distinctive in three ways. First, injury cover is genuinely universal here — folded into registration in every state and territory, so the "uninsured driver" problem that haunts the UK and US applies mainly to property damage, not to people. Second, the no-fault safety net has spread: Victoria, Tasmania, the NT and (since 2020) the ACT run substantially no-fault schemes, and every jurisdiction now covers catastrophic injuries regardless of fault. Third, the design varies internally as much as Europe's does — a green slip you shop for in NSW, a single government insurer in Victoria and WA, an insurer panel behind your rego in Queensland, SA and the ACT. We've written up each one:

NSW · Victoria · Queensland · Western Australia · South Australia · Tasmania · ACT · Northern Territory

What Australia shares with everyone: the compulsory layer never fixes cars. Cover for the vehicle itself is a choice on every continent — and Moneysmart's guide is the neutral place to start weighing it.

What this means if you're selling on MotorLoop

Wherever a buyer comes from, the paperwork instinct travels: cars with clear registration status and history sell faster. State the rego expiry in your listing — it tells an Australian buyer exactly what compulsory cover travels with the car — and listing is free. Looking for your next one? Browse used cars across the country.

FAQs

Which country has no compulsory car insurance?

New Zealand requires no motor vehicle insurance at all. Crash injuries are covered by the universal, no-fault Accident Compensation Corporation (ACC) scheme, which also removed the right to sue for personal injury; property damage is left to voluntary insurance, which most — but not all — NZ drivers buy.

Is car insurance cheaper in Australia than overseas?

It depends what you compare. Australian comprehensive premiums rose sharply through 2023–24 like everyone's, but widely-reported averages in the UK (near £1,000 at the peak) and the US (above US$2,000 for full coverage) suggest Australian drivers have generally fared no worse — and our compulsory injury layer is universal rather than something a driver can illegally skip.

What does "no-fault" insurance mean?

A no-fault scheme pays an injured person's treatment and support without first proving who caused the crash — including single-vehicle accidents. New Zealand's ACC, Victoria's TAC, Tasmania's MAIB, the NT's MAC scheme and the ACT's MAI scheme all work substantially this way; fault-based schemes instead require a claim against the at-fault driver's insurer.