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
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