What’s the difference between CTP and comprehensive car insurance?
Navigating the different types of car insurances available on the market can be confusing. To add to this, along comes Compulsory Third Party (CTP) insurance. To help you make the best choices for your coverage, let’s clear up the differences between CTP and comprehensive car insurance.
What is Compulsory Third Party (CTP) insurance?
Any registered driver in Australia must have CTP insurance, which is where the ‘compulsory’ comes in. CTP insurance is also referred to as ‘Green Slip’ insurance in New South Wales or Motor Accident Injuries (MAI) insurance in the Australian Capital Territory.
CTP insurance covers compensation payments made to 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.
Depending on where you live in Australia, you’ll either have the cost of CTP insurance bundled into your registration fees, or you’ll need to purchase it prior to registering your vehicle.
States/territories where your CTP insurance is bundled into the price of your vehicle registration are:
- Northern Territory
- Western Australia, and
States/territories where you need to purchase CTP prior to registering your vehicle are:
- South Australia
- New South Wales
- Queensland, and
- Australian Capital Territory (known as Motor Accident Injuries insurance in the ACT).
What is comprehensive car insurance?
It’s all in the name! Simply put, comprehensive insurance gives you wider coverage than other additional insurance types.
You can choose either Third Party Property Damage or comprehensive car insurance. Both are different to CTP in that you don’t require them to drive a registered vehicle in Australia. However, not having third party property leaves you liable for damage you cause to other people’s property while drivine. Not having comprehensive also leaves you without cover in the case of damage done to your car by a weather event or another person.
Where third party property damage only insures you for damage you do to another person’s vehicle and/or property, comprehensive car insurance covers your for damage, theft and fire to your own vehicle as well.
Teagan is 35 years old and lives in Melbourne. She just bought a new car and knows her car is registered but doesn’t have any other type of car insurance yet. She plans on getting it next week but decides to use her car to go to the shops that day.
While sitting in her parked car at the shopping centre, Teagan gets a nasty surprise when someone backs into her car while parking.
After exchanging details with the driver, she learns they don’t have any additional insurance coverage beyond their CTP.
If she had her own comprehensive car insurance, she would be covered for the costs of repairing her car. Instead, she has to decide whether to pursue the driver legally for any costs or spend the money herself to repair her new car.
Explore the various included and optional extras available to you when you explore AAMI’s Comprehensive Car Insurance coverage below.
- Buying a new car? Here’s how it may impact your premium
- Customising your car insurance
- What to do in a minor car accident
Insurance issued by AAI Limited ABN 48 005 297 807 trading as AAMI. Read the Product Disclosure Statement before buying this Insurance. Go to aami.com.au for a copy. The Target Market Determination is also available. This 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.