GUIDES & RESOURCES

Do I Need Car Insurance?

In Australia, all registered cars are legally required to have Compulsory Third Party (CTP) Insurance. But do you need more cover than that?
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Updated 12/01/2024
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Reviewed by Toby Hagon and expert tip added.
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Written by

Mel Basta

Updated 12/01/2024

What changed?

Reviewed by Toby Hagon and expert tip added.
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.

Edited by

Laura Crowden

Reviewed by

Toby Hagon

Find out more about how we make money.

View our Privacy Policy.

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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.

Is Car Insurance compulsory?  

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. 

Types of Car Insurance

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 

Third party property 

No 

Yes 

No 

No (but covered by CTP) 

Third party fire and theft 

No 

Yes 

Yes 

No (but covered by CTP) 

Comprehensive 

Yes 

Yes 

Yes 

No (but covered by CTP) 

Source: iSelect 

Do the laws change in different states? 

When it comes to 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 inQueenslandandthe ACT can choose their own provider when registering a vehicle. InNew South Wales, drivers need to purchase a ‘Green Slip’ separately.

Although Comprehensive or Third Party insurance is not compulsory anywhere in Australia, it can be well worth the additional expense.  

Do I really need extra insurance?   

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.  

  • Being a safe driver is enough insurance against an accident: Even if someone is considered a safe driver and has never made a claim, it doesn’t guarantee the same thing for other motorists.

    The fact is, it’s impossible to predict what other drivers will do, and without appropriate insurance, even the best driver could get stuck with a massive repair bill from an accident they didn’t cause.  
  • Their car's value isn't worth insuring: Even if a car isn't worth its value in scrap metal, what if it accidentally rear-ended a shiny new Mercedes in the parking lot?

    Third Party insurance can be a cost-effective way to help cover against damage to other people’s property and help avoid being stuck with the bill for expensive repairs, minus the excess.  
  • It's too expensive: Even a minor fender bender could potentially cost thousands of dollars in repairs and leave you stranded without a car for days or weeks.

    If a claim ever needs to be made, the trade-off in the premiums paid may be well worth it. 

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 havingcar insurancemay only become obvious when needed most.

Helpful Tip:

You shouldn’t just consider the cost of insurance when buying a new car. You may also want to consider what it could cost you if you decide not to get Comprehensive Insurance. With an expensive car you could find yourself in a world of financial pain if the worst were to happen.

Expert Toby Hagon

Toby Hagon, Motoring Journalist

How can I save on Car Insurance?

There are several ways you couldsave 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:  

  • Themarket or agreed valueof the vehicle.  
  • The level of excess preferred ($250, $500, etc.). 
  • Optional extras, such as windscreen protection or roadside assistance.  

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 can I get CTP insurance? 

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 

ACT 

Choose from four licenced Motor Accident Injuries (MAI) insurance providers when registering your vehicle 

New South Wales 

Research and select your own Greenslip Insurance provider 

Northern Territory 

Motor Accident Compensation Scheme 

Queensland 

Choose from four licenced CTP providers when registering your vehicle 

South Australia 

CTP Regulator

Tasmania 

Motor Accidents Insurance Board 

Victoria 

Transport Accident Commission (TAC)

Western Australia 

Motor Injury Insurance Scheme (MIIS)

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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Startcomparing Car Insurance policiesnow or call 13 19 20and let us try and help you find a policy from our range of policies and providers*.

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