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Even though Car Insurance can be an extra cost and hassle, it could be worth forking out for. Here's a look at why having additional Car Insurance on top of CTP Insurance is not just a good idea, but can also provide invaluable peace of mind.
In Australia, there’s no getting around CTP insurance, or 'Green Slip' insurance as it's called in New South Wales. It is a legal requirement in every state and territory.
CTP insurance generally covers financial liability that might arise if you cause a motor vehicle accident (driving your insured car) that results in injury to a third party, including passengers, other drivers and their passengers, cyclists or pedestrians.
It doesn’t cover the cost of damage to the cars and any other property.
While CTP is mandatory in Australia, additional Comprehensive or Third Party Property cover is not.
However, not having additional insurance can leave you financially vulnerable were a car accident to occur.
Car Insurance type |
Damage to your car |
Damage to another person’s car or property |
Damage or loss caused by theft |
Injuries or death to others in an accident |
CTP (mandatory) |
No |
No |
No |
Yes |
No |
Yes |
No |
No (but covered by CTP) |
|
No |
Yes |
Yes |
No (but covered by CTP) |
|
Yes |
Yes |
Yes |
No (but covered by CTP) |
Source: iSelect
When it comes to Compulsory Third Party (CTP) insurance, each Australian state and territory has its own rules and regulations.
Generally speaking, the amount paid for CTP depends on the type of vehicle being registered (for example, a car, bus or caravan), the age of the vehicle and its performance characteristics, as well as the age, driving history and claims history of the driver.
In most states, CTP Insurance is included in the cost of your vehicle's registration, although drivers in Queensland1 and the ACT2 can choose their own provider when registering a vehicle. In New South Wales, drivers need to purchase ‘Green Slip’ separately.3
Although Comprehensive or Third Party insurance is not compulsory anywhere in Australia, it can be well worth the additional expense.
Just because it’s not required by law to carry additional insurance, doesn't mean you should opt out.
Below are some common excuses for not taking out additional insurance, along with the reasons why you should consider extra cover.
So, while not having Car Insurance might save a few bucks in the short term, it could end up being a financial nightmare down the track.
Indeed, the benefits of having a good insurance policy may only become obvious when needed most.
There are several ways you could save money on Car Insurance.
One way to cut costs is to avoid paying for unnecessary policy features.
For example, while Comprehensive Car Insurance offers the highest level of protection, if you are looking to keep costs down then you might be happy with a basic Third Party Property policy that only covers damage to someone else’s vehicles and property.
Alternatively, a Third Party Fire and Theft policy, which includes some protection for a vehicle, might offer some additional peace of mind in the event your car is stolen or in a fire.
Whichever policy is chosen, the price of the premium will vary depending on:
The level of cover that's suitable will depend on your personal situation and budget.
As always, be sure to carefully read through the policy’s Product Disclosure Statement (PDS) before making any purchasing decisions.
Where you get CTP Insurance if it’s not already included in your registration depends on your state or territory:
State |
Where to get CTP insurance |
Choose from four licenced CTP providers when registering your vehicle |
|
Keep in mind that in the ACT, New South Wales, and Queensland, you’ll need to have a CTP insurance policy in place when you renew your registration.
Looking for Comprehensive or Third Party insurance?
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Sources:
1 Motor Accident Insurance Commission – Purchasing CTP insurance
2 ACT Government | Motor Accident Injuries Commission – Learn about your MAI insurance policy
3 Moneysmart - Choosing car insurance