Why do I need CTP insurance?

According to the Australian Bureau of Statistics (ABS), there were 20.1 million registered motor vehicles as at 31 January 2021, with Australian car ownership on the rise. With more of us on the roads than ever before, it’s never been more important to make sure we have the right protection in place to help ourselves and others as we travel from A to B. 

While the goal is always to arrive at our destination safely and without incident, occasionally things don’t go to plan. Nobody chooses to be involved in a car accident but unfortunately, it can happen.

While car insurance covers the damage to cars and property there’s another, arguably more important, type of insurance that exists to help people, specifically those who have been injured in a road accident, to get back on their feet – Compulsory Third Party insurance.

What’s CTP?

Compulsory Third Party (CTP) insurance, also known as a Green Slip in some Australian States and Territories, is a mandatory insurance you purchase before you register your car. CTP covers you (and anyone who drives your car) in an accident where you are at fault and someone else is injured as a result. Think of it as insurance for people, not property.

How does it work?

Hopefully you’ll never need to call on your CTP insurance, but for a moment, picture this scenario as an example: 

It’s a rainy day and you’re driving to work. You turn a corner, lose traction and accidentally collide with another car. The driver of that car (or a passenger) is injured, and they need medical attention. They will probably also need a week off work while they recover.

So, who do you turn to in a situation like this? Who will help with the other person’s medical expenses? Or their potential loss of income? Thankfully, you’re covered, so they are too. Once they put in a claim, your CTP is already in place to ensure that person gets the help they need to recover, and reimbursement for expenses they have incurred as a result of the accident. 

Why is it compulsory?

CTP insurance is compulsory to ensure that anyone who is injured in a road accident can be compensated for their injuries, regardless of the means or income of the person who was at fault. This compensation can provide access to medical treatment and income support while the injured person recovers. 

In most states (except NSW), your CTP is included in your registration. In NSW you must purchase your CTP separately before you can renew your registration. 

If you buy a new car from a dealer, your CTP will be included in your on-road costs. The exception to this is if you buy a new car from interstate. If this is the case, the cost of CTP will be excluded from your purchase price, and you will need to arrange CTP insurance for your car when you register it in your home state. 

If you buy a used car, the CTP policy will transfer over with the car. If the vehicle is unregistered, you will need to take out a new CTP policy.

Does CTP vary between states?

While CTP insurance is compulsory Australia-wide, it does work differently depending on which state you call home. In some states (such as WA) there is only one set CTP provider, while in other states (including NSW, Qld, ACT and SA) you have a choice.

Australian states and territories have different rules around CTP regarding fault, liability, injury and compensation. The cost of your policy can also vary depending on where you live, with some states basing policy pricing on your age, risk factors, driving experience and history. There are also differing requirements for vehicle safety, with some requiring a vehicle identity check before registration. 

Because these do vary greatly between states and territories, it’s wise to check with your state government roads authority to fully understand the requirements you will need to satisfy.

We’re here to help. 

NRMA Insurance has been helping Australians when they need a hand for over 90 years. When you get a Green Slip with NRMA Insurance, depending on the kind of vehicle you drive, we also give you Driver Protection Cover. This is extra cover for you if you cause an accident and suffer certain serious injuries, so you can get back on your feet, too. Call us on 132 132 or get a CTP quote online.

This content is intended to be general in nature and is not financial or professional advice. We recommend you obtain independent professional advice relevant to your circumstances, before making any financial or commercial decisions.