Compulsory Third Party (CTP) Insurance: What it is and how it works in Australia

Compulsory Third Party (CTP) insurance is an important car insurance product to understand, and we’re here to make sure that you grasp what it covers you for.
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CTP insurance is an abbreviation for ‘compulsory third party’ insurance and is the level of insurance cover required by law for all vehicles across all states and territories in Australia, and is a condition of motor vehicle registration.

From what it is and how it protects you, to what’s covered – here’s some of the things you need to know about CTP insurance, also known as a ‘green slip’ in NSW.

What is CTP insurance?

CTP insurance provides compensation for any third parties that are injured or killed if a vehicle is involved in an accident1. This includes other drivers and pedestrians, as well as cyclists, motorcyclists and passengers.

As the name suggests, CTP insurance is a compulsory type of insurance.

What is generally not covered with CTP insurance?

It’s important to note that CTP doesn’t cover damage to your vehicle, or any other vehicles or property involved. It also doesn’t cover damage to your property, or theft and other damage to or caused by your car under various other circumstances. This level of protection is offered through a Comprehensive, Third Party Property or Third Party Fire and Theft policy, which will attract additional costs.

Do you need to purchase additional insurance on top of CTP?

Having appropriate car insurance can provide both peace of mind and financial protection should you find yourself in an unexpected situation. While additional car insurance isn’t mandatory, you will not be covered for third party property, or your vehicle, if you do not take out a car insurance product such as a Comprehensive, Third Party Property or Third Party Fire and Theft policy.

Is CTP insurance the same across every state?

Although CTP is compulsory throughout the whole of Australia, the process, providers and requirements differ substantially across all of the states and territories.

In most states, the cost of CTP insurance is actually included in your vehicle registration fees, meaning you won’t have to think twice about which insurance provider to go for. In Queensland, NSW and the ACT however, you’re required to choose your CTP insurance provider yourself, and it must be purchased separately prior to registration renewal.

In Western Australia, and Victoria, the premiums are included in the annual registration renewal fee, with Victoria’s Transport Accident Commission (TAC) and Western Australia’s Motor Injury Insurance Scheme (MIIS) being the sole providers in their respective states.

In South Australia, motorists can choose between one of the following four private CTP providers: AAMI, Allianz Australia Insurance Limited, QBE Insurance (Australia) Limited and SGIC2.

For more information on the specific requirements for your state contact your local roads and traffic authority.

How are CTP insurance premiums calculated?

This also varies throughout each state, based on a number of factors including fault, liability, injury, and compensation. For example, Victoria takes location and vehicle details into consideration, whereas NSW factors in location, driving record and claims history.

CTP insurance australia

What are the risks of not having CTP insurance?

Drivers that make the choice to drive without CTP insurance or registration also run the risk of being detected by traffic cameras, in states such as South Australia, or police meaning you could end up heavily penalised3.

Further, if an accident does occur involving a vehicle without registration and/or CTP insurance, you’ll be financially liable for any damages paid to any injured parties as the driver or owner.

Please note that CTP does not insure you for damages caused to you or other drivers vehicles or properties1. For protection for the above matters, you may want to consider third party, third party fire and theft or comprehensive car insurance.

Before deciding on a policy ensure you review the Product Disclosure Statement which outlines policy inclusions, exclusions and limitations.

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