Understanding Compulsory Third Party (CTP) Insurance
While its name may vary in different states and territories – such as Compulsory Third Party (CTP) in SA, Motor Accident Injuries (MAI) Insurance in the ACT or a Green Slip in NSW – the purpose of this type of insurance is the same.
While it’s compulsory for all Aussie drivers, almost half of participants to a survey by the Queensland Motor Accident Insurance Commission incorrectly believed CTP covered damage to someone else’s vehicle. What’s more, 37% of participants incorrectly believed CTP insurance would provide cover for damage to someone else’s property.
It’s time to get the facts straight and answer the question: what is CTP insurance? Here’s a list of common CTP insurance myths, debunked.
Myth #1: CTP covers both injury to others and damage to your vehicle
To put it simply, CTP provides cover against medical or alike costs you may be responsible for if you are involved in a motor vehicle accident. CTP may also cover the driver for personal injury. This could be affected if they were fully at fault, not at fault or partially at fault, depending on the state.
Basically, CTP helps ensure that anyone injured in a motor vehicle accident is able to get the medical treatment or other help they need (subject to exclusions). CTP safeguards 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 ensures you’re not out of pocket.
CTP does not cover damage to vehicles or property. Car insurance, like AAMI’s Comprehensive Cover, can provide you with cover for your car and other people’s cars or property.
Myth #2: The level of cover is the same Australia-wide
The name says it all - CTP or MAI Insurance is a must in all states and territories (subject to exclusions). For many states, like Victoria and Tasmania, it’s automatically tacked onto your rego so you don’t need to think twice about it. But if you live in New South Wales, you have to buy it separately from an insurer, like 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 the accident occurs (regardless of 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.
It’s always good to familiarise yourself with your local CTP or MAI Insurance regulations.
- Australian Capital Territory
- New South Wales
- Northern Territory
- South Australia
- Western Australia
AAMI offers CTP insurance for drivers in South Australia and New South Wales, and MAI Insurance in the Australian Capital Territory.
Myth #3: A Green Slip and a pink slip are the same thing
With both Green Slip and pink slips in New South Wales, it can be confusing to get your coloured slips straight. An eSafety inspection report, also known as a ‘pink slip’, is required as part of the yearly registration for most cars more than five years old.
So, if pink slips are part of your registration and verify your vehicle’s safety, what does a Green Slip cover?
A Green Slip is another name for 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. In a case where you might need to make a claim, 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 your car or another person’s car or property, car theft and 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.
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Insurance is issued by AAI Limited ABN 48 005 297 807 AFSL 230859 (AAI) trading as AAMI. Please read the relevant Product Disclosure Statement before you make any decision regarding this product. The Target Market Determination is also available. Any advice has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it.