The difference between CTP and comprehensive car insurance

Owning a car in Australia means navigating some big decisions, and one of the most important is choosing the right type of car insurance.

You’ve probably come across terms like CTP (Compulsory Third Party) insurance and comprehensive car insurance - but do you know the difference? While they may sound similar, these two types of cover serve very different purposes, and only one is legally required.

In this guide, we’ll demystify CTP and comprehensive car insurance, explore how the rules differ across Australian states and territories, and tackle commonly asked questions about the differences between the two.

What is CTP insurance?

CTP, or Compulsory Third-Party insurance, is exactly what it sounds like: a mandatory form of car insurance required for every registered vehicle on Australian roads.

In fact, in most states and territories, you can’t even register your car without proof of CTP insurance. In some cases, it’s conveniently bundled into your vehicle registration fees.

This type of cover steps in if you’re the at-fault driver in a motor vehicle accident, ensuring protection for others by covering injuries or fatalities caused to the people involved. However, the specifics - such as how you purchase CTP, who provides it, and what exactly it covers - can vary depending on where you live in Australia.

What does CTP cover?

CCompulsory Third-party car insurance focuses on protecting others, covering liability for death or injuries you cause to drivers, passengers, cyclists, or pedestrians in an accident where you’re at fault. It’s designed to help the impacted third party from other significant costs, such as:

Medical bills
Hospital and rehabilitation expenses
Lost income due to injury
Ongoing care for severe injuries

However, CTP insurance has its limits. It generally won’t cover damage to your car or any property, including other vehicles involved in the accident. If you’re at fault, your CTP insurer will most likely handle injury-related costs, but repairs for your own car (or anyone else’s vehicle) are your responsibility.

State-by-state laws breakdown: CTP insurance

Because CTP insurance is managed at the state or territory level, the way you buy CTP insurance and what it’s called can differ depending on where you live. Below is a quick breakdown of how CTP insurance works across Australia.

NSW

In NSW, CTP insurance, commonly referred to as a ‘Green Slip,’ must be purchased before registering your car. Several private insurers provide Green Slips, and prices can vary, so shopping around for the best deal is worthwhile. Without a Green Slip, driving on NSW roads is illegal.

QLD

In Queensland, your CTP insurance is included in your vehicle registration, but you can choose your insurer. Costs depend on your provider, vehicle type, and usage. You’ll also need to pay for your CTP at the same time as renewing your registration.

VIC

In Victoria, CTP insurance is compulsory and automatically included in your registration fee as part of the Transport Accident Charge, administered by the Transport Accident Commission (TAC). This means that this compulsory third-party insurance is automatically bundled with your rego, which means you can’t opt out. It’s also important to note this doesn’t include comprehensive insurance - just the mandatory CTP cover.

ACT

The ACT operates under the Motor Accident Injuries (MAI) Scheme. Similar to NSW, drivers choose their preferred private CTP provider when registering or renewing their vehicle. You must have this sorted before your car can be legally registered.

SA

In South Australia, CTP insurance is included in your vehicle registration fee. When you register or renew your car, any CTP insurance premiums are included as part of the total cost. Like in Queensland, you have the option to select your CTP provider.

WA

Western Australia’s CTP insurance is managed solely by the Insurance Commission of Western Australia (ICWA). The premium is automatically included in your registration fee, and there are no alternative providers, as ICWA is the exclusive supplier.

TAS

In Tasmania, CTP is managed by the Motor Accidents Insurance Board (MAIB). The premium is built into your registration fees, and private insurers do not play a role in providing CTP coverage in the state.

NT

In the Northern Territory, CTP falls under the Motor Accidents Compensation (MAC) Scheme and is provided by the Territory Insurance Office (TIO). The cost is included in your registration fees, and TIO is the sole provider of CTP in the NT.

What is comprehensive car insurance?

Comprehensive car insurance offers extensive protection for your vehicle. Unlike CTP insurance, which only covers injuries you cause to others on the road, comprehensive car insurance provides broader coverage for a range of scenarios.

When people mention, "comprehensive motor vehicle insurance" they’re referring to a policy designed to safeguard you financially if your car is damaged, stolen, or involved in an accident. Depending on your policy, it may also cover damage to other people’s vehicles or property, making it a versatile option for more complete peace of mind.

What does comprehensive car insurance cover?

Comprehensive car insurance provides robust protection for your vehicle, covering a wide range of scenarios, from accidents to natural disasters and theft. A typical policy may include:

Damage to your car from accidents, weather events, or fire
Theft or accidental loss of your vehicle
Damage to other people’s cars or property if you’re at fault
Repairs or replacements, based on agreed or market value, depending on your policy
Legal liability for injuries or property damage
Optional extras, like a hire car after an accident, window glass replacement, or roadside assistance (varies by insurer)

Comprehensive cover is an excellent choice if you’re looking to protect yourself and others on the road from unexpected costs. However, no two policies are the same, so reviewing the details, exclusions, and optional extras is essential to find a policy that suits your specific needs.

Is comprehensive car insurance compulsory?

The simple answer is no, it’s not. In Australia, only CTP insurance is legally required to register a vehicle. Comprehensive car insurance, on the other hand, is optional but can provide valuable protection for your car against a variety of risks.

Some drivers choose third-party property damage insurance instead of comprehensive car insurance. This option only provides coverage for damage you might cause to other people’s vehicles or property and is generally more affordable. However, it won’t cover the cost of repairs to your own car if you’re at fault in an accident, leaving you to foot the bill.

CTP vs comprehensive car insurance: What's the difference

Below is a quick comparison of CTP insurance vs comprehensive car insurance, highlighting key differences to help you decide which coverage might suit you.

Difference	CTP Insurance	Comprehensive Car Insurance
Legal requirement	Compulsory for every registered vehicle in Australia.¹	Optional, unless required by your car finance provider.²
What’s covered²	Covers liability for injuries caused to other people in accidents, including medical costs and lost income (if you’re at fault).	Covers damage to your car (which can include accidents, fire, theft, weather), damage to other people’s vehicles or property, and legal liability for damages.
Cost	Typically included in registration fees (or purchased separately in some states). Cost varies by location, insurer, and driver history.³	Generally more expensive due to broader coverage. Premiums depend on your car’s age, make, model, driver profile, and chosen policy features.⁴
Personal benefit²	No coverage for damage to your own car or other people’s property.	Protects your car from damage or theft, and often covers damage to other people’s vehicles or property.
Purchase requirement	Must be in place to register and drive your car.¹	Optional but can provide significant financial protection in the event of an insured event.²

Do you need CTP and comprehensive car insurance?

You must have CTP insurance to drive legally. Comprehensive car insurance, on the other hand, is your choice.

If you’re confident you could cover the costs of repairing your vehicle and any damage to third-party property out of pocket, you might opt to skip comprehensive car insurance. However, this approach comes with significant financial risk, especially considering how costly repairs can be.

For those financing a car, comprehensive car insurance is often non-negotiable. Most lenders require it as a condition of the loan to safeguard their investment.

Even if it’s not required, having comprehensive cover can bring valuable peace of mind. Knowing that an insured event - whether it’s a serious accident, theft, or storm damage - won’t leave you with an overwhelming repair bill or no car at all can make it a worthwhile investment for many drivers.

Is CTP included in comprehensive car insurance?

A common misconception is that comprehensive car insurance automatically includes CTP. If you’ve wondered, “Is CTP included in comprehensive car insurance?” or “Do I need CTP if I have comprehensive car insurance?” - the answer is no. These are two entirely separate forms of cover.

CTP insurance is a legal requirement and is typically tied to your vehicle registration.
Comprehensive car insurance is optional and purchased independently from private insurers for broader vehicle protection.

Even if your comprehensive policy provides extensive coverage, it does not replace the legal requirement for CTP insurance. To drive legally in Australia, your car must have CTP insurance in addition to any other cover you choose to purchase.

Comparing car insurance policies

Selecting the right car insurance depends on your comfort with risk, budget, and the value of your vehicle. To help you decide, consider these key factors:

Financial impact: Could you afford to repair or replace your car if it were stolen or written off? If the answer is no, comprehensive car insurance might be a smart choice.
Vehicle age and value: For newer cars or those with a high market value, comprehensive car insurance provides valuable protection. However, if your car is older with minimal value, you could consider third-party property insurance - though CTP is still mandatory.
Driving habits: If you drive often or in high-traffic areas, your risk of accidents increases. Comprehensive insurance can help protect you financially and reduce stress if something unexpected happens.
Peace of mind: Comprehensive car insurance covers risks like theft, fire, and storm damage, offering extra security beyond what CTP can provide.

Finally, if you’re looking to combine your CTP and comprehensive car insurance in states where the insurer is not fixed, look out for what is often called a CTP and comprehensive car insurance bundle. Just keep in mind that not all states allow you to choose your own CTP provider (e.g. WA, TAS, and NT) because it’s run by a government insurer.

Keep Reading: Learn everything on how to compare car insurance for your needs.

Choosing the right level of cover for your car doesn’t have to be overwhelming. If you own a registered vehicle, CTP insurance is non-negotiable - it’s required by law. Beyond that, opting for comprehensive car insurance can safeguard your pride and joy (and your wallet) from unexpected costs like accidents, theft, or damage.

When deciding if comprehensive car insurance is right for you, consider your car’s value, how often you drive, and your financial ability to cover repairs or replacement, out of pocket. If you’re unsure, don’t worry - comparing a range of policies online with Choosi can help you weigh up your options and find a solution that fits your budget and needs.

With the right policy in place, you’ll enjoy peace of mind knowing you’re protected, whatever the road throws your way. Start your comparison with Choosi today and make an informed decision that works for you.

31 Mar 2025