Third-party property car insurance covers accidental damage to other people’s cars and property, while CTP covers injuries or deaths caused by an accident. Third-party property car insurance is an added level of cover you can get, while CTP is mandatory across Australia.

Third-party property car insurance can cover damage caused to someone else’s property while driving your car (up to policy limits). CTP insurance, also known as a ‘Green Slip’ in NSW, only covers drivers who are liable for personal injury to another person in a car accident. This can include other drivers, passengers, cyclists and pedestrians.

Your registration fee usually includes the cost of your CTP. But if you live in Queensland, New South Wales, or the Australian Capital Territory, you typically need to choose your CTP insurance provider yourself, either before or as part of your registration renewal.

Third-party property insurance typically covers the costs of repairing or replacing other people’s property, including their vehicle, if it’s accidentally damaged by your car. Third-party property cover can also include uninsured motorist damage, which can cover the insured vehicle itself for a limited amount if it’s damaged by an uninsured vehicle or driver.

While there are limits to how much can be claimed, coverage can include the cost of repairing or replacing someone else’s car, house, shop, caravan, boat, bicycle or property in general. It’s also important to know that third-party property insurance will generally not cover damage to your own car if an accident occurs. So, make sure you consider whether you want your car covered when choosing a policy.

Third-party property car insurance generally doesn’t cover your own car for accidental damage or for other events such as storm damage, theft or vandalism. A third-party property policy can come with other typical car insurance exclusions, such as accidents that happen while you’re driving under the influence or with tyres that are not legally safe. Some insurers will refuse to cover your car if you use it for undisclosed purposes, such as a taxi service that you haven’t told your insurer about.

There are other exclusions you should be aware of when taking out third-party property car insurance. These are spelt out in more detail within the Product Disclosure Statement. This can be an extensive list, so be sure to read them carefully.

More specifically, exclusions on a third-party policy may include:

• Damage to your vehicle: Third-party property insurance won’t cover damage to your own car in the event of an accident. It also won’t cover any of your property if it’s stolen from your car or damaged in an accident.
• Being under the influence: Third-party property insurance won’t cover you driving while breaking the law, which includes being under the influence of drugs or over the legal alcohol limit. Unsurprisingly, this applies to all car insurance types, even comprehensive.
• Breakdowns and wear and tear: Car insurance is skewed towards covering accidental damage, not breakdowns, punctured tyres or damage caused by wear and tear including rust and mould.
• How you use your car: You typically won’t be covered if you use your car for any purpose you didn’t list on your insurance application. So, hiring out your car, using it as rideshare or taxi or using it as a race car (even as an amateur) all require you to apply for special cover.

Needless to say, if you don’t pay your premium or renewal and then try to claim outside of any period of grace, you’re generally not insured.

Third-party property insurance is worth considering if you’re more concerned about covering repairs on someone else’s car rather than your own. For example, if you have a cheaper car and you can pay to repair or replace it yourself, third-party property insurance might be an option.

But if your car is expensive or you can’t afford to replace it yourself, comprehensive insurance or third-party property, fire and theft could be a more appropriate choice. The same goes if you live in an area with a lot of car theft.

To get a better idea of whether third-party property is an option to consider, here are some questions worth asking yourself.

• Is my car at risk of a break-in?
• Do I live in a high-crime area?
• Can I afford repairs on another person’s car?
• Can I afford paying for any other damage to someone else’s property?
• Can I afford to repair or replace my own car? If not, can I get around without a car until I can replace it?

To fully understand what each policy covers, read through the Product Disclosure Statement or your policy’s certificate of insurance.

No, a third-party property policy doesn’t include the cost of towing your car after an accident you caused. However, if someone without car insurance collides with your car and damages it to an extent that leaves it undrivable, a third-party property policy maycover some of the towing and storage costs.

If you’d like to be covered for towing after an accident, you might want to consider other types of car insurance such as comprehensive car insurance or third-party property, fire and theft. For towing after a breakdown, you can consider getting roadside assistance.

Many providers offer annual, monthly and fortnightly payment options, with annual payments typically being the most cost-effective.

Your third-party property car insurance policy won’t cover your car if it’s damaged in an accident that isn’t your fault. That’s because the legal liability falls on the at-fault driver and their insurance policy, if they can be identified and they have insurance. Some policies offer to cover your car’s damage up to a certain limit if it was caused by an uninsured driver.