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Understanding CTP insurance 


While its name may vary in different states and territories – such as Compulsory Third Party (CTP) or Green Slip in NSW, or Motor Accident Injuries Insurance (MAI) in the ACT – the purpose of this type of insurance is the same.

While it’s compulsory for all Aussie drivers, a recent survey showed that almost 70% of drivers don’t know what it covers. What’s more, only 19.4% of young drivers (aged 18-24) actually understood the purpose of CTP Insurance!

It’s time to get the facts straight. Here’s a list of common CTP insurance myths, debunked.

Myth #1: CTP covers injury to others and damage to your vehicle

To put it simply, CTP covers costs for personal injury claims made by other ‘third parties’, including drivers, passengers and pedestrians involved in an accident on the road. It also covers you for personal injuries if you weren’t at fault or only partially at fault (depending on the state). In other words, it’s insurance for injuries, not for your car! Car insurance, like AAMI’s Comprehensive Cover, will actually give you cover for your car.

CTP insurance can also safeguard you from having to pay claims made against you if you injure somebody on the road. Compensation for third parties can be costly, so CTP insurance makes sure you’re not out of pocket.

Myth #2: The level of cover is the same Australia-wide

The name says it all - CTP is a must in all states and territories. For many states, like Victoria and Tasmania, it’s automatically tacked onto your rego so you don’t need to think twice about it. However, if you live in New South Wales, you have to buy it separately from an insurer. Like, say… AAMI!

The tricky thing is that what’s covered varies from state to state. Things like fault, liability, injury and compensation are really dependent on where your car is registered. For example, at fault drivers in New South Wales may be eligible for compensation while this may not be the case in Victoria.

Confusing, hey? It’s always good to familiarise yourself with your local traffic authority’s CTP regulations.

Myth #3: A green slip and a pink slip are the same thing

With both green slips and pink slips in New South Wales, it can be confusing to get your coloured slips straight. A pink slip, also known as an eSafety check, is required as part of the yearly registration for most cars more than five years old.

A green slip, on the other hand, is the name of the CTP insurance all car owners have to pay every year. Just because you have your pink slip doesn’t mean you have your green slip! Make sure you do your colour slip checklist every year when you renew your registration.

If you’re required to get a pink slip so you can get your green slip, it will say so on your registration renewal notice.

Getting the right level of cover for you

Remember CTP is not the same as car insurance, it’s something you need to buy separately on top of it. A comprehensive car insurance policy, like AAMI’s Comprehensive Car Insurance, can fill the gaps of cover that you won’t get with CTP insurance. This includes damage to another person’s car or property, car theft or damage to your car caused by attempted theft. Whether it’s a prang or a major accident, having car insurance on top of your CTP can save you from being potentially thousands of dollars out of pocket.

Not sure what level of car insurance cover you need? AAMI’s got your back.

Explore AAMI Car Insurance  

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Insurance is issued by AAI Limited ABN 48 005 297 807 AFSL 230859 (AAI) trading as AAMI. Read the Product Disclosure Statement before buying 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.