If you’ve just moved to Australia or only recently bought a car, you’re probably wondering what type of car insurance to buy. The last thing you want is to get into a serious accident and have no way to pay for another person’s damages, let alone your own car’s repairs.
CTP insurance, or ‘Green Slip’ insurance, is a legal requirement throughout the whole of Australia. Having it at the very least also helps cover associated costs in the case of an accident where the other party is injured.
But what about comprehensive car insurance? And what makes compulsory third-party (CTP) insurance different from normal third-party insurance?
Australia Insurance Law
First of all, let’s address the law. CTP insurance is legally required in Australia if you own a car, but you don’t need to get any other insurance on top of it.
Each state and territory has its own regulations and rules. In most states, CTP insurance is included with your vehicle’s registration. Drivers in New South Wales, the ACT, and Queensland can choose their own provider.
However, even if you’re an amazing driver, you’ll most likely want to get some kind of additional car insurance on top of your CTP insurance. Additionally, something as simple as a dashcam can make a huge difference in keeping yourself and others accountable on the road.
What exactly does CTP insurance, or compulsory third-party insurance, cover?
First of all, “third-party” refers to the person who is injured. The first party refers to you, the driver. The second party is the CTP insurer of the vehicle.
CTP covers people who have been injured or killed when your vehicle gets into an accident. Benefits given to the injured party depend on how serious their injuries are.
Usually, coverage includes the cost of an ambulance, the hospital visit and stay, rehab, and any other long-term care costs. If you’ve gotten into an accident, one of the worst things that can happen is getting sued for physical injuries incurred.
Mandatory CTP insurance helps protect you from a lawsuit, as well as provides financial protection for anyone that suffers an accident.
There is a notable difference, however, between compulsory third-party insurance and other types of car insurance, such as a different third-party provider.
Third-Party Car Insurance
Third-party car insurance refers to coverage that typically only benefits the other person in the accident, rather than the owner.
In terms of insurance, it’s one of the cheaper and more basic options. While your vehicle and personal injuries will not be covered, this type grants you some level of legal protection since the other party doesn’t have to worry about repairs.
It also pairs well with CTP, as the combination of the two will completely cover another person’s vehicle damages and any hospital visitation.
Comprehensive Car Insurance
While CTP insurance is often covered in your vehicle registration fees, it doesn’t do much in the case of a minor car accident where no one gets hurt. If your bumper is busted or windows have shattered, you’ll still have to take it into the shop and pay the full price for repairs.
For full coverage on the road, you’ll want to look into comprehensive car insurance.
Comprehensive coverage, as the name implies, offers the highest level of financial coverage for everyone involved in a car accident. Regardless of who caused the damages, this type of car insurance will pay for all vehicle damage, including fire, theft, or damage the driver has caused outside of a collision.
Policyholders can choose between market value or agreed value, meaning you can decide your premiums based on your level of coverage. If you can’t afford to pay higher premiums, you simply have to agree to your insurance paying less if your car is stolen or completely destroyed.
Some features included in your comprehensive coverage can include after-accident care, choice of mechanic, rental vehicle availability, and roadside assistance. It also covers repairs after a natural disaster.
CTP and Comprehensive
As far as CTP And Comprehensive Insurance goes, there isn’t much of a debate to be had. They both serve very different roles in protecting you, the driver, in a vehicle collision.
CTP is legally required and will accompany you as long as you drive a car. In most cases, it comes when a vehicle is legally registered.
Even if you drove someone else’s vehicle, you’d still be covered by CTP coverage because it’s tied to the vehicle, rather than the driver. This also means that if you bought a used vehicle, it would already come with the relevant insurance.
The only way to get around that is if you drove an unregistered vehicle, which is a whole other legal matter, entirely.
Comprehensive car insurance, meanwhile, isn’t mandatory at all. If you want to drive around without it, you can do so freely.
However, you’ll be responsible for paying the complete bill for car repairs. In some cases, you may have to pay for the other party’s damages.
You also can’t take advantage of the many benefits of comprehensive insurance, such as roadside service or a rental car when yours is in the shop.
CTP vs Comprehensive As Your Provider
The road is a dangerous place, with or without insurance. While it’s nice that CTP insurance is mandatory and can help cover someone’s hospital bills, what about afterwards?
When considering CTP vs comprehensive car insurance, the latter offers complete property coverage. You won’t have to worry about getting sued over someone else’s totalled vehicle, or struggling to get around when you’ve lost yours.
If you ever find yourself in a legal conundrum where someone’s insurance provider isn’t willing to cover your damages or doesn’t exist at all, reach out to us. We can get you sorted.