With more than 21 million cars registered in Australia, as counted on 31 January 2021, it’s no surprise that selecting the right car insurance is a priority for many Aussies.1 But did you know there are different types of car insurance available and that, when it comes to compulsory car insurance, arrangements differ across the states and territories?
“When buying car insurance, it’s important to take the time to understand exactly what you're being covered for and what your options are so you can make the choice that suits your situation best,” says Marni Jackson, Youi’s Head of Product – Vehicle.
In Australia, it’s mandatory for all cars that are used on public roads to be registered with compulsory third party insurance – also known as CTP or, in New South Wales, Green Slip insurance.
However, it can be worth thinking about taking out additional car insurance to protect yourself, your vehicle and your back pocket in the event of a car accident.2
Here we’ll answer some of the most common questions about car insurance. Remember, when buying any type of insurance, you should consider your own circumstances.
What is the minimum level of car insurance cover required in Australia?
At an absolute minimum, you need CTP insurance to register your vehicle to legally drive it on public roads in Australia. It provides financial protection for drivers against injuries or death caused to a third party in the event of a car accident.
“CTP is a compulsory insurance cover required in order to register and drive your vehicle,” explains Glen Robinson, Youi’s Head of Product – CTP.
“It provides coverage for claims made by any passengers, pedestrians and other road users not at fault in a motor vehicle accident and covers costs such as treatment, care and rehabilitation, and may cover loss of income and damages in some states.
“In New South Wales, for example, there is also limited coverage for injuries to the driver of the motor vehicle at fault. It’s important you check what you’re covered for in the state you drive in.”
It’s also worth noting that CTP insurance doesn’t cover you for damage to your own vehicle, the third party’s vehicle or other property damaged in a car accident. Because of this, it could be worth taking out extra car insurance like Comprehensive, Third Party Fire & Theft or Third Party Property Only, for greater protection on the road.2
How does CTP differ across the states and territories?
In most states and territories around Australia, CTP insurance is included as part of the registration fee. In some instances, you might be able to select a specific insurer from a list, whereas other states operate with a single CTP provider.
In New South Wales, Green Slip insurance must be purchased separately, prior to renewing your car registration.3
CTP cover varies across the different states and territories based on a number of factors such as fault, liability and compensation benefits payable. There might also be different requirements for car safety and personal identity checks prior to registering a vehicle, so it’s worth checking your state or territory’s registration requirements.
Here’s a quick run-down on how CTP works in each state and territory:
Compulsory third party car insurance in the ACT
In the Australian Capital Territory, CTP insurance is managed by the Motor Accident Injuries (MAI) Scheme.4 Drivers have a choice of insurers with the premium paid as part of the registration process.
Is car insurance compulsory in the NT?
In the Northern Territory, CTP insurance is included in the registration fee and managed by the NT Motor Accidents Compensation Commission.5 The NT operates under a no-fault CTP scheme, so there’s no need to prove fault to make a claim.
Understanding the NSW Green Slip
In New South Wales, a Green Slip must be purchased separately from a choice of insurers, including Youi, prior to registering your vehicle.3 Depending on the age of your vehicle, it might also need a safety check, known as a Pink Slip, before it can be registered.6 Green Slip premiums differ based on a range of factors including driver age, type of vehicle, location and driving record.
Compulsory third party car insurance in Qld
The Motor Accident Insurance Commission (MAIC) is the regulatory authority in Queensland.7 The CTP fee is included in the cost of registration and can be selected from a choice of insurers.
How does CTP insurance work in SA?
CTP cover in Tas
CTP cover in Tasmania is operated by the Motor Accidents Insurance Board (MAIB).9 The premium is included in the registration fee.
Understanding CTP in Vic
The Transport Accident Commission (TAC) is the sole CTP insurer in Victoria and is funded through the TAC charge as part of the registration fee.10
WA CTP scheme
In Western Australia, the Insurance Commission of Western Australia (ICWA) is the sole CTP insurer.11 The insurance premium is included in the registration fee.
It’s worth noting that New South Wales and South Australia are the only states in which Youi provides CTP insurance.
What other car insurance options are available at Youi?
While CTP insurance is mandatory, there are three additional levels of cover that most drivers consider.
“You can choose from 3 levels of cover; full comprehensive cover, covering your car and any third party property damage, third party property damage including cover for fire and theft, or you can choose just to cover third party property damage,” says Jackson.
Here are your options at Youi:
- Third party property only: As the name suggests, third party property insurance only provides you with coverage in the event you damage someone else’s car or property in an accident that is your fault. This level of coverage doesn’t include any damage to your own vehicle.12
- Third party fire and theft: In addition to covering you for damage to someone else’s property, this type of insurance also provides coverage if your vehicle is stolen or damaged as the result of attempted theft, and coverage if your car is damaged as a result of fire.13
- Comprehensive: Comprehensive car insurance protects you against a wide range of incidents.14 “This is the highest level of cover and includes coverage for damage to the insured vehicle caused by an insured event, such as car accidents, theft, intentional damage, fire, and severe weather events like storm, hail and floods,” explains Jackson.
When deciding which type of insurance might suit you, the Australian Government’s MoneySmart website recommends thinking about whether you can live without your car if it's written off or stolen.15 It also pays to consider if you can afford any expenses associated with damage to someone else's car if you have an accident.
Insurance cover does vary across providers and policies, so always check your Product Disclosure Statement (PDS) to make sure you’ve got the right cover for your needs.
Article by guest writer Chelsea Spresser
1 Source: Bureau of Infrastructure and Transport Research Economics – Road Vehicles, Australia January 2023
2 See our Car PDS for full details
3 Source: NSW Government - CTP insurance (Green Slips)
4 Source: ACT Government - Your MAI insurance
5 Source: NT Government - NT Motor Accidents Compensation Scheme
6 Source: NSW Government - eSafety checks (pink slips)
7 Source: Qld Government - Motor Accident Insurance Commission
8 Source: SA Government - CTP Insurance Regulator
9 Source: Tas Government - Motor Accidents Insurance Board (MAIB)
10 Source: Vic Government - Indemnity provided by the transport accident charge
11 Source: WA Government - Compulsory third party
12 Available with Third Party Property Only policies. See our Car PDS for full details
13 Available with Third Party Fire and Theft policies. See our Car PDS for full details
14 Available with Comprehensive policies. See our Car PDS for full details
15 Source: moneysmart.gov.au - Choosing car insurance