Everything you need to know about CTP car insurance
Compulsory third party (CTP) car insurance, sometimes known as a green slip, protects you from legal and medical costs arising from injuries and deaths caused by car accidents.
CTP insurance is compulsory in Australia. You cannot register your vehicle without it. You are covered by your CTP insurance round the clock for any passengers in your vehicle and for other people on the roads, including pedestrians and cyclists. You are also covered for any injuries resulting from the use of a trailer.
CTP insurance is only for injuries to people. It does not cover any damage to vehicles or property.
All states have their own CTP insurance schemes, managed by that state’s Insurance Regulatory Authority. In Queensland, New South Wales and the ACT, drivers may choose their CTP insurance provider, while in South Australia, Victoria, Tasmania, Western Australia and the Northern Territory it’s automatically built in to vehicle registration.
Compare CTP Insurance from Australian Insurers
The Motor Accident Authority green slip calculator is a free government service for finding CTP insurance in NSW.
Your CTP options
All CTP insurance in your state is exactly the same, except for two things:
- At-fault cover: This is additional cover offered by some insurers in the event of an accident that you are found to be responsible for. Standard CTP still covers at-fault drivers to some extent, but people who choose this option have higher payout limits and are covered for a wider variety of at-fault circumstances than those who don’t.
No one is a perfect driver and the cause of an accident is often disputed. There’s always a chance that you may be found at fault.
- Price: CTP insurance prices in QLD, NSW and the ACT will vary as CTP insurance providers try to offer competitive rates and have different ways of determining driver risk levels. Depending on your location and driving history, you will get better prices from some than others.
Because prices can be similar, it’s good to look for safe-driver and multi-policy discounts from insurers.
There are only six CTP insurance companies
Choosing a provider is easy because only six insurance companies in Australia are licensed to provide CTP insurance. Of these, three have the option of additional at-fault cover.
|Insurer||Offers At-Fault Cover?|
What a compulsory third party insurance covers
CTP ‘green slip’ insurance sees that people who were injured or killed in a motor vehicle accident anywhere in Australia can receive compensation irrespective of the financial situation of the driver(s).
The type of compensation available covers both economic and non-economic loss, meaning that hospital, medical and rehabilitation expenses as well as loss of income will be covered, as is pain, suffering and loss of quality of life. The level of compensation available is limited and there are a lot of factors which determine exactly how much someone will be awarded.
The damages from the accident are awarded by the at-fault party’s CTP insurance, which covers injuries sustained by both parties. CTP includes things other insurance policies won’t:
- Special children's benefits, which states that children younger than 16 can apply for this benefit and be compensated, even if they were the cause of the accident;
- Blameless accidents, which stipulates that people who were killed or suffered an injury in an accident can receive compensation, even if there wasn't anyone to blame. Such accidents include those caused by drivers who suffer a sudden medical issue, such as a heart attack, collisions with animals that could not be avoided and inexplicable mechanical problems.
- Bulk billing arrangements. This proviso states that the expenses associated with hospital care, ambulance transport and any other treatments needed for the at-fault driver are funded by the insurance policy, just like for any other person that was injured in the accident. Regardless of who is to blame, the scheme will cover the expenses in question;
- Accident notification provisions. An early payment of $5,000 entitlement extended to both the at-fault driver and the victim, to cover treatment and loss of income by lodging an Accident Notification Form (ANF).
Despite all these, the at-fault party is still not entitled to receive all the benefits that other parties who were injured in the accident have access to. There are certain benefits that are not covered by the bulk billing arrangements or the accident notification provisions, which guilty parties do not have access to.
The guilty party cannot file a claim for:
- Any expenses over $5,000 incurred in a medical facility that is not a public hospital connected to medical treatment, pharmaceuticals and rehabilitation;
- Attendant or respite care;
- Changes to their residence;
- Benefits to cover loss of quality of life, pain and suffering;
- Loss of income past the $5,000 ANF limit;
- Future loss of income.
CTP coverage differs between states, but is the same within each state regardless of which insurer issued the policy. For this reason you should try to find other liability insurance to cover what your CTP insurance doesn’t, rather than vice versa.
The product disclosure statements provided by insurance companies contain full detail on what is and is not covered by at-fault insurance, while CTP insurance details for your state can be found in the Motor Accidents Compensation Act 1999 and the Motor Accidents Act 2006, including:
- The people who are entitled to receive compensation;
- How the compensation can be paid out;
- The maximum amount of compensation that can be awarded.
How to buy CTP insurance
Every state has certain insurance companies that are licensed to sell CTP policies, and some of these companies will permit other agents to sell in their name.
To buy a CTP insurance policy, you will have to provide the insurer or the agent with information regarding your situation This can include things like:
- Your vehicle's make, model and manufacturing year;
- The postcode of where you garage your vehicle;
- Whether you use your vehicle for personal reasons or your business;
- How old you are or the age of anyone else who may drive your vehicle;
- Details of any accidents you have been involved in as well as your insurance and claims history;
- Details pertaining to your driving record, including information on your driver's licence.
If the CTP premium is determined based on incorrect information and it leads to a lower premium than you should actually be paying, the insurance company will demand that you pay the difference. If you don't do so, you could end up having the registration of your vehicle cancelled.
If purchasing from an insurance agent, the first thing you should do is ask which company they represent. As of March 2016, only AAMI, Allianz, CIC Allianz, GIO, NRMA and QBE are licensed to sell CTP insurance. You may also wish to get in touch with the insurer and check whether or not the agent in question has their authorisation.
Always compare prices in NSW, Queensland and the ACT, with the Australian government’s Motor Accident Authority green slip calculator. This compares all the licenced insurance companies.
How CTP insurance prices are determined
Because it’s mandatory, CTP insurance must be affordable. There is an allowable price range, and all CTP insurance premiums must fall within these boundaries. They determine the risk level for a vehicle and its drivers, and then adjust prices based on these. They do this by categorising a range of factors.
Location and vehicle type
The state insurance organisation provides up to date charts showing the typical risk levels and costs associated with different types of vehicle in different regions. Prices are updated annually according to the latest figures. For example, the average cost per policy of claims tends to be smaller for motorcycles, higher for cars and even higher for trucks, and lower in metropolitan areas than country zones.
Different states and regions have different prices. Business vehicles are on the road more, and are therefore at higher risk, than private cars, while cars stored in a garage are safer than those parked on the road.
After using this to establish a price range for the vehicle itself, the insurer looks at your individual risk factors.
Individual risk factors
Insurance companies try to consider as many individual risk factors as they can, including:
- Your accident history
- How old the all the regular drivers of your vehicle are
- How old your vehicle is
- Whether you have comprehensive property insurance or third party property insurance
- Whether your vehicle is being used for personal or business purposes
- Whether you are renewing CTP or purchasing a new one policy
Generally, if you are a safe driver, you are more likely to receive a better price for your CTP insurance.
You are encouraged to shop around for green slip quotes in states where applicable, because within the allowable price range, insurers calculate prices differently depending on the situation of each individual driver. This means that renewing CTP insurance with the same provider does not guarantee you will get the lowest price. Shop around if you want to save some money.
Even if you are an extremely risky driver, the insurer cannot increase your premiums with very high loadings, which could make the premium unaffordable.
CTP insurance premiums on motorcycles
There are five different classes of motorcycles for determining CTP costs. None of the six licensed insurers offer at-fault cover for motorcycles.
- Up to and including 225cc
- 226cc to 725cc
- 726cc to 1125cc
- 1126cc to 1325cc
- 1325cc and greater
More powerful motorbike categories carry higher costs, while the geographic region and personal circumstances also impact the price you pay for compulsory third party insurance. The extent to which personal risk factors are taken into account will differ between insurers, which is why you should take the time to get quotes from each of the six insurers offering motorcycle CTP insurance in NSW, Queensland and the ACT.
CTP insurance in different states
Sam, living in New South Wales, and his friend Rob in Victoria, were childhood friends that had stayed in touch over the years. They both got their first car at a similar time, and realised that CTP insurance was quite different in both states. Rob simply had it included as part of the registration process and hardly gave it a thought, but Sam had to shop around for his NSW CTP green slip. He compared all six providers, and all the options before deciding on the more expensive, but safer, CTP at-fault cover.
As luck would have it, they both got into very similar car accidents in their own states at about the same time, several months later. Both of them had accidentally rear-ended a car which suddenly stopped in front of them, and both ended up breaking their noses on the steering wheel. And both, naturally, ended up making insurance claims.
Sam in NSW, with his optional at-fault CTP insurance, had his medical expenses covered even though he was more responsible for the accident. But Rob, in VIC wasn’t covered precisely because he was more responsible for it.
In the end, Rob was spending less on CTP insurance but paid a bigger price, while Sam took the option of spending more and had it pay off.
Frequently asked questions about CTP insurance
What is a CTP green slip?
A CTP green slip is a type of mandatory insurance policy that provides coverage for damages claims for the person driving a vehicle that is to blame for an accident, or involved in a no-fault accident. It ensures that injured people can seek compensation.
CTP stands for 'Compulsory Third Party'. Greenslip, green slip, ctp green slip and compulsory third party insurance are all interchangeable terms for the same type of insurance.
Do I need CTP insurance?
Yes. You cannot register a vehicle in Australia with it.
Do I have coverage outside my state?
CTP insurance covers you in any state, anywhere in Australia.
Who and what does the CTP green slip cover?
CTP insurance provides coverage for the compensation of someone who sustained injuries or was killed in a vehicle accident. This includes pedestrians, passengers, cyclists, motorcyclists, and the person driving the other vehicle. The guilty party is also covered but to a lesser degree. Trailers are covered by the insurance of the vehicle towing them.
What doesn't CTP cover?
A green slip does not provide coverage for the following:
- A driver who is to blame for the accident doesn't have access to all of the benefits of the scheme, unless they have suffered devastating injuries as laid out by the Lifetime Care and Support Scheme. In this case, the latter insurance plan applies;
- Damage your vehicle or property incurred;
- Damage caused to the other person's vehicle or property;
- If your vehicle was stolen.
Where can I get a CTP green slip?
CTP green slips are sold by insurance companies but these have to be licenced to do so. They must also be in full compliance with the stipulations of the Motor Accidents Compensation Act 1999. At the moment, there are six insurance companies who are authorised to sell CTP green slips in Australia.
Licenced insurance companies are regulated by the State Insurance Regulatory Authority.
Who establishes the premiums?
The premiums are not the responsibility of the Government. Instead, they are calculated by the insurance companies. However, they are required to submit their premium schedules first to receive approval.
What happens to my premium?
The premium you pay is used to cover compensation payments, research and education projects as well as to improve road safety.
How do I know my green slip is legitimate?
If you think you may have purchased a fake green slip, you can confirm its authenticity by checking with the insurance company named on it. The six licensed CTP insurance companies are AAMI, Allianz, CIC Allianz, GIO, NRMA and QBE.
What about learner drivers?
Learner drivers require no special CTP procedures, although you are required to let your CTP insurance provider know about them if they ask.
Can the insurer change my premiums?
CTP insurers can put forward new pricing schemes anytime they wish but they must do so at least once a year or when the state insurance groups determines they have to, which is usually July 1st. Insurers regularly change CTP premiums.
Why are my CTP premiums increasing?
Premiums increase to reflect changes in driving risk levels. One of the main reasons premiums typically increase is because increasing numbers of people make claims.
Which insurance companies offer CTP insurance?
There are currently six insurance companies licensed to sell CTP in Australia. They are Allianz, AAMI, CIC Allianz, GIO, NRMA and QBE.
Are there price differences between CTP insurers?
Some insurance companies will offer a cheaper green slip than others but the price of the CTP from each insurer should be identical for that company, regardless of whether you purchased it directly from the company or from an authorised insurance agent.
When purchasing a green slip, you have to make sure that the price was correctly calculated according to the type of vehicle you own and the other details you provided. If this calculation is correct, then a CTP from the same insurance company should be the same price, no matter where you bought it from.
Why is there a price difference for green slips from different insurance companies?
Each insurance company is responsible for determining their own prices. And while these prices are regulated, insurance companies use different variables and give these factors different levels of importance when working out what they will charge in terms of premiums.
What is the simplest way for me to compare prices on green slips?
The simplest way to conduct a price comparison between the green slips offered by each of the six insurers is to use the price service comparison service on offer. The green slip calculator will supply you with a price from each insurer for a green slip based on the type of vehicle you own and other information. You will also be supplied with contact information for each of the insurers so you can contact the one you decide on to make the purchase.
The green slip can be purchased via phone and the insurance company will inform the RTA electronically. However, the green slip calculator only works for common types of vehicles, so if your vehicle isn't part of one of these classes then you will have to contact the insurance companies separately to conduct your own comparison. You will also have to contact the insurers directly if you want to claim an input tax credit for GST.
Are there any differences between CTP green slips?
There are no differences between CTP green slips, irrespective of which insurer you purchased yours from. The only difference lies in the AT Fault Driver Cover, which is an optional and additional feature.
All green slips provide the statutory coverage the law requires. Of the six insurers, three companies also offer At Fault Driver Cover. This feature is definitely something you should consider because it offers benefits for the driver who was to blame for the accident.
What is at Fault Driver Cover?
With the green slip scheme, the driver to blame is only covered if he or she suffers catastrophic injuries. However, some insurance companies offer an extra benefit with their CTP green slips, namely At Fault Driver Cover. This policy ensures the driver who caused the accidents gets some level of compensation for the injuries they incur. The amount of compensation differs from one insurance company to the next.
Can I get At Fault Driver Cover from any insurance company?
No, because only three of the six licenced CTP insurance companies offer At Fault Driver Cover. These are Allianz, GIO, NRMA Insurance and Zurich.
What is the simplest way to get in touch with the insurance companies?
All insurance companies have a phone number specifically for quotes and the purchase of green slips. Keep in mind that not all of these companies have an online system via which you can get a quote or buy your green slip.
When I sell my car, what happens to the green slip?
A green slip travels with the vehicle, so when you sell your car or other vehicle, your green slip is transferred to the new owner. If you purchase a vehicle that has already been registered, you need to ensure that the registration is transferred to your name. Then, you won't need to purchase a new green slip for that particular vehicle until its current registration hits its expiration date.
The RTA is notified of an ownership transfer whenever a vehicle is bought or sold. The RTA then informs the insurance company that issued the green slip of the fact that the vehicle has a new owner.
Am I allowed to cancel my green slip?
If you choose to do so, you may cancel your green slip. However, to do this, you need to contact the RTA to cancel your registration first. Subsequently, if you provide your insurance company with proof that you cancelled your registration, you are entitled to receive a refund that is equivalent to the amount of time left on your green slip.
There is a chance that the insurance company might charge a penalty because you are cancelling your policy and you might not be able to get a refund of the MCIS Levy.
What variables impact the price of my green slip?
There are quite a number of variables that insurance companies take into account when they calculate the premium they will charge for a green slip. These factors also have different levels of importance for each insurer, which further influences the price and is a good reason for people to shop around for quotes.
The main variables taken into consideration include geographic area, vehicle type, vehicle age, how the vehicle performs, age of the driver, driving history and your history in terms of the number and value of the claims you have lodged.
Why is the price for a green slip different if I want to claim for GST?
If you want to claim an input tax credit for GST, then be prepared to pay more for the green slip because prices are higher. Insurance companies can charge more because they do not receive an input tax credit for GST when paying out claims. Additionally, there are certain administrative expenses the insurer needs to cover when implementing the GST.
Do all insurance companies notify the RTA electronically and how long does this process take?
When you buy your green slip all insurance companies will inform the RTA electronically. If you buy your green slip direct from the insurance company, it takes about one hour for the company to inform the RTA. If you are working with an insurance agent or broker, then you will have to ask them how long it will take for the RTA to be notified.
What is an e-green slip?
An e-green slip simply refers to the RTA being informed electronically by the insurance companies of the purchase of a green slip.
Do I receive any discounts on other insurance policies?
Of the six licenced insurance companies, two of them offer discounts on some of the other policies they offer if you purchase your green slip from them.
Is it possible to get a cheaper green slip from an agent or broker?
The law states that the price for a CTP green slip from a certain insurance company has to be the same no matter where it is being procured from. So, you will pay the exact same amount, whether you are getting it from the company or from an agent.
As long as the price of the CTP green slip has been calculated correctly according to your personal information and vehicle type, the price of this insurance policy should be identical, irrespective of whether you are buying it from the insurer or an agent or broker.
What is an eSafety Check?
eSafety Checks were previously referred to as Pink Slips and represent the report detailing the safety inspection of your vehicle. An eSafety Check is mandatory if you want to renew your vehicle registration.
How often should I take my vehicle in for an eSafety Check?
If your vehicle is new, you likely won't need an eSafety Check for the first five years. If you own a vehicle older than five years, then you will have to take it in for an eSafety Check every year. However, you needn't worry about timing because the renewal papers the RTA issues will inform you whether or not you need to take your vehicle in for an e-Safety Check before you can renew its registration.
Where can I get an eSafety Check?
You must take your vehicle in to an Authorised Inspection Station, also known as an eSafety Station, to get your eSafety Check. These stations issue the eSafety Check electronically and send it straight to the RTA. You can find a list of eSafety Stations at myrta.com.
May I register my vehicle for less than a year?
Cars, motorcycles and light trucks can be registered for either six or 12 months while trailers can be registered for three or 12 months. A green slip can also be bought for six or 12 months.
However, keep in mind that when you buy your green slip, it has to be valid for the same length of time as the period for which you will be registering your vehicle. If you wish to renew the registration of your vehicle for less than a year, you can do it online at myrta.com.
What if I am transferring my vehicle from another state?
When transferring a vehicle from interstate, the registration requirements are somewhat different. However, you will still need to purchase a CTP green slip. Details regarding the requirements for the registration of a vehicle coming from another state are available at myrta.com.
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