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How Do Compulsory Third Party (CTP) and Third Party Car Insurance Differ?


If it’s your first time buying car insurance, it can be easy to lose track of what you’re covered for.

Giving your car the coverage it deserves starts with knowing the difference between Compulsory Third Party (CTP) and Third Party Car Insurance.   

What is Compulsory Third Party Insurance (CTP)?

CTP insurance covers compensation payments for people injured or killed in a motor vehicle accident. It doesn’t cover the cost of damaged vehicles and property, or damage to – or loss of – your vehicle.

In Australia, you’re required by law to have CTP insurance, but the way you buy it depends on where you live.  

In Victoria, Western Australia,Tasmania and Australian Capital Territory, CTP insurance is included in the price of your vehicle registration.

For South Australian motorists with registration renewals due on or after 1 July 2019, it’s your choice to select a Compulsory Third Party (CTP) insurer. Lucky for you, AAMI has your SA CTP needs covered.

In New South Wales (where it’s better known as ‘Green Slip’) and Queensland, you must have CTP insurance before you can register your car. You can buy it directly from a licensed insurer. Like other forms of car insurance, you’ll have to give details about yourself, other drivers and your vehicle when you apply for it.

What is Third Party Car Insurance?

Third Party Car Insurance covers you if you’re involved in an accident with another vehicle or property – say, an inconveniently placed fence or a neighbour’s letterbox – and you’re at fault. It’s an economical car insurance option for many Australians, especially if you can’t afford to pay for repairs out of your own pocket.

AAMI offers Third Party Car Insurance, with cover for damage to your own car caused by fire and/or theft available as an optional extra.

Discover AAMI Third Party Car Insurance

Property Damage

Covers damage to other people's vehicles or property. It also includes cover for damage caused to your car by uninsured drivers. This can be a good level of cover in case an accident happens and you can't afford to pay the repair costs for the other person’s vehicle or property.

This option doesn't include cover for any damage caused to your car by another driver, except for the limited cover for damaged caused by uninsured drivers mentioned above. It may be a good option if you have a car that you could easily afford to repair or replace – say, if you have a second-hand car that’s done a tonne of kilometres – but you don’t want to be up for massive repair bills in case you hit someone else’s car or property.

Fire & Theft 

An optional extra to Third Party Car Insurance, it can cover against fire, theft, or attempted theft, and is another layer of cover against any damage to your vehicle.  

Choose the right cover for your vehicle

Car insurance is an important investment which can potentially save you thousands of dollars in out-of-pocket expenses. That's why it's important to get the right level of insurance, so you're properly covered if an accident happens.

Here's a brief run-down of the different types of car insurance:

CTP Insurance – only insures drivers for the costs of a third party's injuries after an accident.

Third Party Car Insurance – covers damage to other people’s vehicle or property.

Comprehensive Car Insurance – covers all your bases, including damages to your own vehicle or property, plus you can access the AAMI Safe Driver Rewards® program.

Compare AAMI Car Insurance

This is a good time to consider whether you'd like additional features built into your insurance, such as windscreen and window glass cover for repairs.

You can easily compare the price of AAMI Car Insurance when you get a quote online. Alternatively, drop us a line on 13 22 44, 8am-10pm (AEST) 7 days a week.

Read more: 

AAMI Car Insurance, Motorcycle Insurance, NSW and ACT CTP Insurance, and Caravan Insurance are issued by AAI Limited ABN 48 005 297 807 AFSL 230859 (AAI) trading as AAMI. AAMI Roadside Assist is an optional extra only available in conjunction with AAMI Comprehensive Car Insurance. Consider the Product Disclosure Statement before making a decision about this insurance. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.

Buy a new AAMI Comprehensive Car Insurance Policy and you can receive one year FREE AAMI Roadside Assist, plus receive $50 off when you buy online.

Offer ends 10th July 2020. T&C’s apply. Not in conjunction with other offers.