The difference between CTP and comprehensive car insurance

When it comes to car insurance, you might be wondering ‘Do I need both comprehensive and compulsory third-party (CTP) insurance?’

As the name suggests, CTP insurance (also known as a ‘Green Slip’) is a compulsory insurance policy that every driver must have. However, its scope of cover tends to be limited, which is why drivers also choose to take out comprehensive car insurance.

To help you understand the differences between comprehensive car insurance and CTP insurance, keep reading to discover what each type covers, the legal requirements you need to consider, and how to select the right level of cover for your situation.

What is CTP insurance?

Compulsory third-party car insurance (CTP insurance) is a mandatory type of car insurance all Australian drivers need to have. You’ll commonly hear CTP insurance referred to as a Green Slip, with this policy designed to offer a financial safety net if someone is injured or passes away in a motor vehicle accident.

To register a car in your local state or territory, you’ll need a Green Slip in place. Plus, CTP insurance is linked to your vehicle’s registration (rather than you as an individual driver), meaning it covers anyone who drives your car.

What does CTP cover?

CTP insurance covers drivers in the event of a motor vehicle accident including the costs of compensation claims made by those who are not at fault, such as pedestrians, passengers, cyclists, motorcyclists and those driving other vehicles.

If a car accident occurred, CTP insurance could cover the costs of the third parties receiving medical treatment and care, any loss of income resulting from this accident as well as eligible damage claims. In short, if you were to injure or cause the death of another person in a car accident, CTP protects you from personal liability.

Additionally, close family members of the deceased may be able to claim some expenses through your CTP policy. Keep in mind that if you’re charged with a serious driving offence during this car accident, you won’t be able to claim the benefits of your CTP policy.

On the other hand, CTP insurance doesn’t cover the costs of any damage caused to vehicles or property as part of this accident.

State-by-state laws breakdown: CTP insurance

CTP insurance is mandatory in all states and territories across Australia. However, each state and territory has different rules and regulations.

NSW

• From 1 December 2017, a new ‘no-fault’ CTP scheme in NSW means that all injured people are covered, regardless of fault. Claims can be made for up to 26 weeks after the accident on the benefits of CTP policies in NSW.
• In NSW, you’ll need to purchase your CTP policy separately from a private insurer prior to registering your car.
• Plus, to register your car, you may also need to get a safety check conducted in NSW (known as a Pink Slip), particularly if you have an older car model.

QLD

• In Queensland, the Motor Accident Insurance Commission (MAIC) regulates CTP insurance, aiming to keep premiums affordable for QLD residents.
• There are a number of private insurers you can choose from in QLD when taking out your CTP insurance policy.
• In QLD, you are able to take out a CTP insurance policy for one month, three months, six months or 12 months.

VIC

• In Victoria, the Transport Accident Commission (TAC) is the only provider of CTP insurance policies.
• When paying for car registration in VIC, there are two parts to your fee: your registration fee and your TAC fee (your CTP car insurance).

ACT

• From 1 February 2020, the new Motor Accident Injuries Scheme means that there is also a no-fault policy in place in the ACT.
• That means anyone who is injured or loses income due to a motor vehicle accident can receive benefits for up to five years.
• There are four insurers (AAMI, APIA, GIO and NRMA) that offer MAI insurance policies in the ACT.

SA

• In South Australia, the CTP Insurance Regulator has nominated five government-approved insurers: AAMI, Allianz, NRMA, QBE and Youi.
• When renewing your car registration in SA, you’ll need to provide the name of your CTP insurer on your renewal notice.

WA

• In Western Australia, CTP insurance is only provided by the Insurance Commission of Western Australia (ICWA).
• When your vehicle is registered with the WA Department of Transport, you’ll pay for your CTP insurance policy along with Catastrophic Injuries Support (CIS).

TAS

• In Tasmania, the Motor Accidents Insurance Board (MAIB) manages all CTP insurance policies.
• When you register your vehicle in TAS, you’ll also pay your CTP insurance premium and receive a MAIB certificate.

NT

• In the Northern Territory, CTP insurance is managed by the NT Motor Accidents Compensation Commission.
• When you register your vehicle in the NT, you’ll also pay for your CTP insurance at the same time.
• Like NSW and VIC, a no-fault scheme is in place in the NT (known as the Northern Territory Motor Accidents Compensation Scheme) meaning anyone can make a claim on the benefits of the policy, regardless of who’s at fault.

What is comprehensive car insurance?

Comprehensive car insurance offers the highest level of protection against the cost of damage. Unlike CTP, comprehensive car insurance covers the costs of damage to your own car as well as any damage caused to other vehicles or property.

As you’d expect, the premiums for comprehensive tend to be higher than third party insurance options. That’s because this type of insurance offers more comprehensive cover.

Plus, the costs of comprehensive car insurance can be impacted by a range of factors, such as the excess you choose, your driving history, your age and gender, the age and model of your vehicle and even where your car is parked at night.

What does comprehensive car insurance cover?

In specific terms, a comprehensive car insurance policy will typically cover:

• Theft, accidents, fire or weather-related damage to your vehicle.
• Any damage caused by you to someone else's car or property in an accident.
• If your car is deemed a total loss, you may be covered for a replacement car.
• Damage or loss of certain personal items inside your car (usually capped at a dollar amount).
• Essential repairs to ensure your car is roadworthy and certain towing costs.
• Emergency transport and accommodation if you’re a certain distance from home.

Plus, many comprehensive car insurance providers will give you the ability to add on optional extras to your policy, such as:

• No excess for glass or windscreen damage.
• Hire car cover.
• Roadside assistance.
• Choice of repairer.

Importantly, comprehensive car insurance does not cover compensation claims for injuries to you or others. That’s why taking out both comprehensive and third-party car insurance allows for complete cover as a driver.

CTP vs comprehensive car insurance: how to compare car insurance policies

Comparing your car insurance options is a helpful way to figure out what policy is right for you. When assessing your options, it’s worth looking at the features and benefits of each car insurance policy, such as:

• Premiums: how much will you need to pay to secure cover?
• Excess: what out-of-pocket sum will you need to pay before your insurance kicks in?
• Payment: can you choose the frequency of your premium payments?
• Exclusions: what isn’t covered by your policy?

Ultimately, understanding the differences between CTP and comprehensive car insurance allows you to decide which policy is right for you. So, if you’re ready to compare your options, Choosi makes it easy by helping you compare, choose and apply.