Compulsory Third Party (CTP) Car Insurance

If you're looking for affordable Compulsory Third Party (CTP) car insurance, This comprehensive guide will help you understand the ins and outs of CTP insurance.

What is Compulsory Third Party Car CTP insurance?

CTP cover protects you against legal claims for damages caused to other people or their property, in an accident that might be your fault. It’s the minimum legal requirement for car insurance in all states and territories in Australia and is designed to protect third parties involved in any accident with your vehicle.

What does CTP insurance cover?

CTP car insurance, also known as Green Slip insurance in some states, is a mandatory insurance policy required in Australia if you wish to register your car. Cover varies by state and territory, but generally includes the following:

• Personal injury compensation: CTP insurance covers compensation claims related to injuries or death caused by your vehicle and/or the driver of your car (which may or may not be you). Compensation cover can include medical expenses, rehabilitation costs, and loss of income for the injured person.

Note that CTP insurance does not cover damage to any property or vehicles involved in the accident. It only covers personal injury claims. For comprehensive car cover to insure your vehicle in other scenarios, read our Comprehensive Car Cover Guide here.

Who is a ‘third party’ in my car insurance?

'Third party' is any individual, property, or entity other than you and your insurance company. In the context of car cover, the ‘third party’ is someone not directly involved in the insurance contract, but possibly affected by your driving. For example: if you’re involved in an accident with another driver, they are the ‘third party’ when you make your insurance claim.

Other examples of a ‘third party’ in car insurance claims include pedestrians, passengers in other vehicles, and owners of any damaged property. CTP car insurance is designed to protect these third parties by covering you for any damage or injuries they may sustain in an accident caused by the driver of your car.

The reason this cover is so important, and why it's legislated across all states and territories in Australia, is due to the potential high costs associated with third-party injuries in serious incidents. Medical expenses, rehabilitation costs, loss of income, and compensation for pain and suffering can quickly add up to significant amounts, often far exceeding the costs of vehicle damage.

Without CTP insurance, the at-fault driver would be personally liable for these costs, which could lead to severe financial hardship. By making CTP insurance compulsory, the government ensures that all road users have some level of protection and that victims of road accidents have access to the compensation they need for their recovery.

Can CTP insurance be transferred?

No, CTP car insurance can’t be transferred. When you sell your vehicle, the cover policy doesn’t transfer to the new owner. The new owner is responsible for obtaining their own insurance for driving the vehicle. It’s very important to update your registration details when you sell your car, even if its done privately.

If the person who buys it is involved in an accident, and you’re still the registered owner, you may still be held legally liable for any damages claims.

How does CTP cover work?

CTP insurance operates on a no-fault basis, meaning that compensation is provided, regardless of who caused the accident. When a vehicle is registered in Australia, it automatically requires CTP insurance. You can’t legally register your car - or drive it - without minimum CTP car cover.

What are the pros & cons of CTP car cover?

Pros of CTP car insurance:

• Mandatory coverage to comply with legal requirements.

• Provides compensation for personal injuries to third parties.

• Usually more affordable compared to comprehensive insurance.

Cons of CTP car cover:

• Doesn’t cover damage to your car.

• Doesn’t cover theft, fire, or other non-injury incidents that can damage your car.

• Limited cover compared to comprehensive insurance.

State-specific differences in CTP car insurance:

Each state and territory in Australia has its own governing body that manages and regulates CTP car insurance. As a result, the cover, benefits, and administration of CTP insurance varies across jurisdictions. It’s advisable to consult the relevant state or territory authority, or your insurance provider, to understand the specific details of CTP insurance in a particular location.

Additionally, some states offer optional additional coverage known as At-Fault Driver Cover or Fault-Based Cover, allowing drivers to claim for their own personal injuries if they’re at fault in an accident.

It's crucial to stay informed about the specific CTP insurance requirements and regulations in your state or territory to ensure compliance with the law, and to understand the protections you’re entitled to if you’re ever in an accident - whether or not it’s deemed to be your fault.

The cost of CTP insurance can vary significantly based on several factors. These include the type of vehicle you drive, your age, your driving history, and the state in which your vehicle is registered. It's important to note that each state has its own rules and regulations regarding CTP insurance, which can influence the cost. The following table provides an estimate of cost ranges:

What’s excluded from CTP car insurance?

CTP car cover typically doesn’t cover:

• Damage to your vehicle.

• Damage to other vehicles or property.

• Theft or fire damage to your vehicle.

• Any non-personal injury-related expenses.

Who is CTP car cover for?

CTP Third Party insurance is suitable for drivers who own older or lower-value vehicles & drivers who don’t require cover for vehicle damage or other non-injury-related incidents.

Paul Coughran is the General Manager of Emerging Verticals at Compare Club. Paul has over 20 years of experience across a wide range of industries including Banking and Finance, Telecommunications and Energy. Paul leads a team of trusted experts dedicated to helping individuals make informed decisions about their insurance and utilities needs.

Meet our car insurance expert, Paul Coughran

Paul's top car insurance tips

• 1

  Regularly compare your insurance policies – You could be paying for cover you don’t need. Shopping around every so often can save you a fair bit, maybe even hundreds each year.

• 2

  Don’t just look at the premium—check the excess too. While a higher excess might bring down your premium, remember you’ll have to fork out more if you do need to claim.

• 3

  Double-check what’s included in your policy. Extras like windscreen cover or roadside assistance might not be part of the deal and could cost you more.

• 4

  If you don’t drive much, consider usage-based insurance. Some policies base your cost on how much you actually drive, if you work from home or only use your car for short trips this might be a much better option.