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- Car Insurance Terminology
CTP Insurance – What You Need to Know
CTP stands for Compulsory Third Party. It’s the basic level of insurance cover required by law for all vehicles within Australia, and is a condition of motor vehicle registration.
From what it is to how it protects you, here’s everything you need to know about CTP insurance.
What is Compulsory Third Party Insurance?
Compulsory Third Party Insurance – or ‘Green Slip Insurance’ as it’s known in NSW – provides compensation for any third parties injured or killed if your vehicle is involved in an accident. This includes other drivers, passengers, pedestrians, cyclists, motorcyclists and pillion passengers.
As the name suggests, CTP insurance is compulsory Australia-wide. It ensures that the level of compensation available to claimants is not dependent on the means of the person who caused the accident. Without it, equal compensation might not be available for everyone who needs it.
In most states and territories, the cost of CTP is included in your vehicle registration fees and you don’t need to think twice about it. However, in NSW, Queensland and the ACT, you’re free to choose your own CTP insurance provider, and it must be purchased separately prior to registration renewal.
It’s important to note that CTP insurance does not cover damage to your vehicle or other vehicles or property. It also does not cover theft or other damage to or caused by your car under other circumstances. For that, you will need an appropriate level of Comprehensive, Third Party Property or Third Party Fire and Theft cover.
Driving around without adequate car insurance could potentially have serious and long-term financial consequences, so don’t risk it, find out more about why you need car insurance here.
How does CTP work?
The details of the CTP process may vary across the different states and territories, but generally:
- The premium is paid as a requisite part of your vehicle registration – it may be included or separate, depending where you live.
- The premium is received by the insurer or body underwriting the scheme. If the insurer is not a government body, it will pay a levy to a state authority in support of road safety campaigns, research and education projects.
- The insurer or underwriting body pays claims for compensation payments. These may include the (reasonable) cost of medical treatment, disability support, rehabilitation, income assistance, travel and household support.
If an accident occurs involving a vehicle without registration and/or CTP insurance, the driver and owner will be financially liable for damages paid to any injured parties.
Is CTP the same in every state?
The process, providers and requirements for CTP insurance vary considerably across the different states and territories.
In Queensland, NSW and the ACT, for example, CTP cover is purchased from a chosen provider as a separate step prior to renewing registration. In Western Australia, Victoria and South Australia, however, 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.
The calculation of premiums also varies around the country based on a range of factors, including fault, liability, injury and compensation. For instance, NSW takes location, driving record and claims history into account, while Victoria considers location and vehicle details.
See how CTP insurance works in your state:
- New South Wales
- Northern Territory
- South Australia
- Western Australia
Get total peace of mind with the right level of Comprehensive or Third Party cover. Start comparing car insurance policies now, or call iSelect HQ on 13 19 20 and let us help you find a policy with the features you need at a price that fits your budget.