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What Is CTP Insurance and Do You Actually Need It?

CTP insurance

If you’ve ever registered a car in Australia, you’ve probably heard of Compulsory Third Party (CTP) insurance. But do you really understand what CTP insurance covers and why we all need it?

Car insurance can be a confusing topic, especially when you consider the different types of policies available and the coverage they can provide. In this article, we’ll unpack important information about CTP insurance – also known as Green Slip insurance in NSW – including:

  • W​hat it covers
  • Why it’s mandatory when registering a car in Australia
  • How it differs across the states and territories
  • How it fits in with other ​types of car insurance.

What does CTP insurance cover?

In the event of an accident, CTP insurance helps cover at-fault drivers from compensation claims associated with injuries to other people or fatalities caused by that accident.1

“CTP insurance helps provide coverage for claims made by any passengers, pedestrians and other road users not at fault in a motor vehicle accident,” says Youi’s Head of Product – CTP, Glen Robinson.

“It 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 at fault of the motor vehicle.”

CTP insurance is linked to your vehicle’s registration rather than individual drivers, which means anyone who drives your vehicle is covered by your policy. However, it’s important to note that CTP insurance only covers injuries caused by the accident. It doesn’t cover you for damage to your own vehicle, the third party’s vehicle or other property damaged in a car accident.

Is CTP insurance compulsory?

As the name suggests, CTP insurance is mandatory for all vehicles registered in Australia.2

This means you need CTP insurance to be registered to legally drive on public roads in Australia. In terms of car insurance, CTP insurance is the absolute minimum level of coverage required.

How does CTP insurance work in different states and territories?

Despite the fact that CTP insurance is a requirement in all states and territories, there are slight differences in how each state or territory handles the purchase of CTP and the cost to drivers.

“In some states, your CTP insurance is paid along with your vehicle registration, but in New South Wales your CTP needs to be purchased separately before you can register your vehicle,” explains Robinson.

“CTP insurance is privately underwritten by insurers in New South Wales, South Australia, Queensland and the ACT but in all other states in Australia, CTP insurance is managed by the government.

“Governments will also consider different factors in setting premium levels to ensure future scheme affordability, cover lifetime care benefits for seriously injured road users, and administrative expenses. This can lead to variations in premiums between states.”

Youi CTP is available in New South Wales and South Australia.

CTP insurance NSW: How does it work?

In New South Wales, CTP insurance is also known as a Green Slip, or CTP Green Slip, and 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 in NSW, before it can be registered.4

Green Slip premiums can differ based on a range of factors, including driver age, your driving record, your vehicle’s age and your claims history.5

CTP insurance SA: What to know

In South Australia, CTP insurance is paid at the same time as your motor vehicle registration and is overseen by the CTP Insurance Regulator.6 It can be selected from a choice of insurers, including Youi.

CTP insurance Qld: How can I get covered?

The Motor Accident Insurance Commission (MAIC) is the regulatory authority for CTP insurance in Queensland.7 The CTP fee is included in the cost of registration and can be selected from a choice of insurers.8

CTP insurance Vic: How it works

The Transport Accident Commission (TAC) is the sole CTP insurer in Victoria. The fee appears as a ‘transport accident charge’ on the Registration Renewal Notice. Once the registration fee (which includes the transport accident charge) is paid, the vehicle owner is covered by CTP insurance.9

CTP insurance WA: Who is it covered by?

In Western Australia, the Insurance Commission of Western Australia (ICWA) is the sole CTP insurer.10 The insurance premium is included in the registration fee.11 

CTP insurance Tas: How is it managed?

CTP cover in Tasmania is operated by the Motor Accidents Insurance Board (MAIB). The premium is included in the registration fee.12

CTP insurance ACT: Can I choose my cover?

In the Australian Capital Territory, CTP insurance is managed by the Motor Accident Injuries Commission (MAIC).13 Drivers are able to choose between four insurers, and the premium is paid as part of the registration process.14

CTP insurance NT: How does it work?

In the Northern Territory, CTP insurance is included in the registration fee and managed by the NT Motor Accidents Compensation Commission.15 It is a no-fault CTP scheme, so there’s no need to prove fault to make a claim.16

Do I need other types of car insurance on top of CTP insurance?

CTP insurance is the only mandatory car insurance in Australia. However, depending on your personal circumstances, it could be worth considering taking out extra cover, such as Third Party Property Only, Third Party Fire & Theft or Comprehensive Car Insurance, for greater protection on the road.17

Before deciding which policy (or policies) could work best for you, it’s important to understand the levels of cover provided by these different types of car insurance. Explore the ​different types of car insurance here.

 

 

1 Source: Moneysmart – Choosing car insurance
2 Moneysmart – Buying and running a car
3 Source: NSW Government – What is a Green Slip?
4 Source: NSW Government – Get a safety inspection report (pink slip)
5 Source: NSW Government – How are prices set?
6 Source: SA Government – Purchasing CTP
7 Source: Qld Government – Motor Accident Insurance Commission
8 Source: Qld Government – About CTP insurance
9 Source: Vic Government – Indemnity provided by the transport accident charge
10 Source: WA Government – Compulsory Third Party
11 Source: WA Government – Insurance policy
12 Source: Tas Government – About the MAIB
13 Source: ACT Government – Your MAI insurance
14 Source: ACT Government – Frequently Asked Questions
15 Source: NT Government – NT Motor Accidents Compensation Commission
16 Source: NT Government – Who is Covered?
17 See our Car PDS for full details