Compulsory Third Party (CTP) Insurance: What Is It and How Does It Work?

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Updated 08/02/2024
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Updated what is covered, how it works across states and how premiums are calculated; added section on registration
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Written by

Mel Basta

Updated 08/02/2024

What changed?

Updated what is covered, how it works across states and how premiums are calculated; added section on registration
Our aim is to help you make better informed decisions. That’s why iSelect’s content is produced in accordance with our fact-checking and editorial guidelines.

Reviewed by

Toby Hagon

Find out more about how we make money.

View our Privacy Policy.

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What is CTP Insurance and what does it cover? 

As the name suggests, it’s compulsory to have CTP Insurance if you want to take your car on the road. However, depending on where in Australia you call home, you might know it as something different. For instance, in NSW, it’s more commonly called a Green Slip.  

Given that car accidents, unfortunately, can involve more than just the car and driver, CTP Insurance helps to cover the compensation of any third parties injured or killed in an accident with your vehicle. Cyclists, pedestrians, motorcyclists and other drivers all fall into this third-party category. CTP Insurance can then help with care and treatment costs, as well as loss of earnings and compensation for pain and suffering. If you caused the accident or even if there’s a few questions about who’s to blame, then your eligibility for compensation or the amount you receive may depend on your state’s approach to at-fault and no-fault accidents. 

What doesn’t CTP Insurance cover? 

The clue is in the name for this question — you’re not really going to be covered for damage to anything other than the third parties themselves. This means that your car, other cars and any property that got tangled up in the accident won’t be covered. To get more coverage, you might want to look into further Car Insurance, like Third Party Property Insurance or Comprehensive Car Insurance

Is CTP Insurance the same across every state? 

While Federation may have united the country in some respects, Australian states and territories do like to have their own unique quirks too, even when it comes to CTP. For instance, if you live on the east or south coast, you’ll likely be able choose your providers. That is unless you live in Victoria. For Victorian drivers, your CTP premium from the Transport Accident Commission will come wrapped up in your rego. Keeping things simple with a set provider isn’t uncommon though — this is basically how everywhere else in the country handles it from Tassie to the NT

Helpful Tip:

In some states and territories, you can’t choose your CTP Insurance, but in NSW, QLD and the ACT you can shop around something that could save you hundreds of dollars. But make sure you read the Product Disclosure Statement (PDS) for exclusions and added extras. While CTP provides a minimum level of cover, in some cases insurers may offer beneficial extras.

Toby Hagon

Motoring Journalist

Is CTP included in my registration? 

If you’re suddenly worried that maybe you’ve been driving around CTP-free, chances are you’re in the clear. The majority of Australians actually pay their CTP premium as part of their rego fee, even if you’re picking your insurer.  

ACT Yes 
NSW No 
NT Yes 
QLD Optional 
SA Yes 
Tas Yes 
Vic Yes 
WA Yes 

How is my CTP Insurance premium calculated? 

Like any other type of insurance, you’ll be paying a premium to get that CTP coverage. How that premium figure is decided though, once again, comes down to your location. For instance, in QLD, it’s really just about the class of vehicle you drive, when your CTP is due, and a levies and admin fee to help keep the whole thing running.  

On the other hand, a few more things go into the recipe for SA CTP, like the type of vehicle and what you use it for, along with where you keep it and if you can get an input tax credit for your CTP under GST law.  

Thankfully, no matter where you live, doing all the sums for your premium isn’t your job. The insurer handles that.  

What risks are there if I don’t have CTP Insurance? 

Whether you intend to be a smooth criminal or not, it’s illegal to drive your car without CTP. If you’re picked up by highway patrol, you could find yourself handing over a fair chunk of change and even have your car taken away. And this is if you’re lucky. 

If you were to get into an accident, you could get left with triple the whammy of paying fines, the costs incurred by the third party and their compensation too. Even the most carefree gamblers in Las Vegas would have to admit that it’s probably not worth taking that risk. 

Thankfully, your CTP is usually covered by your rego. So, if you’ve been putting off renewing it, now might be the time to check it off your to-do list. 

Does my CTP cover me when I’m driving interstate? 

If you’re a keen road tripper, you can enjoy a little piece of mind knowing your CTP coverage extends across the country. But how this plays out may depend on which state or territory the accident occurred in, along with whether you were at fault or not. It could be worth brushing up on what the local CTP scheme covers or even stepping up your coverage from just CTP. 

Do I need to get additional Car Insurance? 

Legally, you’re good to go once you’ve got CTP. But you might find it a little easier to sleep at night if you investigate some more coverage.  

Remember, CTP doesn’t cover you for vehicle or property damage, so if you were to get in an accident, you’d be looking at paying out of pocket to get your car fixed up and potentially any other damaged property. If you drive a clunker or recently won the lottery, this might not be a concern for you, but we reckon you’d rather not be footing the bill all on your lonesome, especially if you cause an accident with a Rolls Royce – ouch! 

Where can I compare Car Insurance? 

If you want to add a little more grunt to your Car Insurance that CTP just can’t provide, iSelect can help. With a range of Car Insurance options from a selection of insurers, you can get more protection on and off the road. See for yourself with our online comparison tool or give our comparison experts a call today on 13 19 20

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