Compulsory Third Party (CTP) Insurance in Australia

When I first arrived in Australia back in November 2007 and bought my first car, I had to pay, like anyone else, for rego, or car registration. This is the thing that we Brits would call car tax, but Australian rego was slightly different.

I thought it was quite “quaint”, as in attractively unusual rather than old-fashioned, that third-party insurance was included with this rego. To give it its full name, Compulsory Third Party (CTP) insurance.

wreck

Car insurance in the UK

In the UK, for those who don’t know, for the most part we would choose between fully comprehensive, third-party fire and theft and just third-party for our car insurance and that would be totally separate from car tax.

Fully comprehensive, or fully comp, meant if you had an accident, the cars, the buildings and whatever else you smashed into would all be fixed up and paid for, including any damage to your own car no matter whose fault it was, by the insurance company. Personal injury, injury to other people, whiplash, all paid for.

Third-party fire and theft covered everything above except damage to your own car, but you would get paid out for your own car if it caught fire or was stolen.

Third-party didn’t cover your own car for anything, but did cover all damage to other cars and property and injury claims from other people.

Third-party was the absolute minimum insurance drivers would have to take out to legally drive a car.

Car insurance in Queensland

Note that I said Queensland, not Australia; I’ll take a quick look at the rest of Australia later. On with the story.

About 2 1/2 years ago we bought a second car…

second car…the one Mrs Bobinoz has been driving around in ever since. We didn’t bother getting fully comprehensive insurance; we felt that the CTP included in rego would be enough. A couple of weeks ago we found out exactly what CTP insurance really is.

As I have done more research on this subject for today’s post, I came across this description of CTP …”Compulsory Third Party (CTP) personal injury insurance.”

As that full description along with those extra three words on the end imply, it covers personal injury, not your own if the accident was your fault, but the personal injury of your passengers and anybody else involved in the accident.

It does not cover any damage to cars, buildings or any kind of property whatsoever.

We didn’t know that, we were thinking in terms of the UK’s “third party” insurance.

Gulp!

Had my wife collided with a Lamborghini Gallardo LP550-2 Coupe E-Gear Nero Serapis (approximately half a million dollars worth) towing a Mustang 3800 Le Sportscruiser speedboat (a $150,000 toy) causing both irreparable damage while at the same time both herself and the driver of the other vehicle walked away unscathed…

“Oh my word, I’m so sorry, I didn’t see you and that great big boat!”

“No worries, these things happen, eh? You OK?”

“Not a scratch on me!”

“Me neither.”

… then that CTP insurance would have meant for nothing and we would have had to dig deep into our pockets (hehe) for about $650,000.

Just goes to show, doesn’t it, that it pays to read the small print.

Fortunately, in those 2 1/2 years, no such accident happened and we are not, as I speak, bankrupt.

Yes we’ve been a bit foolish, no, we should not have made assumptions, but I did think this was well worth mentioning so that others do not make the same mistake that we have.

What are the rules in the rest of the country?

Firstly, rules change, so always be sure you do what I didn’t do, and read the small print. Secondly, this is just a cursory and quick look around the rest of the country, it is not a definitive guide to car insurance in Australia.

Here’s what I think happens in other states:

New South Wales

CTP insurance, called a “green slip” is the minimum legal requirement but it is NOT included in rego, it is a separate item. You will need to arrange your CTP insurance first otherwise you will not get your rego, and if you let your rego run out, then your insurance becomes invalid.

Victoria

In Victoria it is known as the Transport Accident Commission (TAC) charge but it is CTP insurance just the same. Like Queensland, it appears to be part of the rego fees.

Western Australia

Seems to be exactly the same as New South Wales, except they do not have a fancy name for it.

South Australia, Tasmania and ACT

Seems to be exactly the same as Queensland, except they do not have a fancy name for it.

Northern Territory

Seems to be exactly the same as Queensland, except they operate a “no-fault” accident compensation scheme, this means that if you injure yourself you will be able to claim medical expenses for your personal injury, even if the accident was your fault.

There you go, simple, wasn’t it?

As I have already said, this was a very quick look at insurance around Australia, so please do check the small print and make sure you know what the current rules are.

Is this a problem?

I just have one question out of all of this; if you are driving your Lamborghini Gallardo LP550-2 Coupe E-Gear Nero Serapis (approximately half a million dollars worth) towing a Mustang 3800 Le Sportscruiser speedboat (a $150,000 toy) and somebody with CTP insurance does smash it all up, how are they really going to pay you?

Any answers?

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{ 14 comments… add one }
  • thomas August 24, 2014, 9:16 pm | Link

    Hi Bob.

    We will. The question is more like what insurance do you have that covers your personal injury ? It seems like there is no car insurance that covers that here right ?

    • BobinOz August 25, 2014, 6:51 pm | Link

      Interesting question, I’m not sure you can get insurance to cover personal injury here, well but policy I have certainly doesn’t cover it. My fully comprehensive policy covers damage to my car up to its full value plus up to $20 million worth of third-party property damage, no mention of people and absolutely nothing for me.

      Does anyone else reading this know if you can get personal injury insurance on a car policy here in Australia?

      Maybe that’s a separate insurance altogether, just a general personal injury insurance or maybe full hospital health insurance.

  • Thomas Erlund August 22, 2014, 9:44 pm | Link

    Hi Bob.

    We just arrived here on a 457 and my wife starts to work next month. She will get a company car. What insurance do you need to cover your own personal insurance if the accident was your fault ?

    In Denmark where I come from the insurance covers both parties.

    “it covers personal injury, not your own if the accident was your fault, but the personal injury of your passengers and anybody else involved in the accident.”

    Thank you again for probably the best site for informations on Australia

    • BobinOz August 24, 2014, 8:22 pm | Link

      I think you will need to take that up with your wife’s employers Thomas, they will have insurance, but you will need to know exactly what it covers from your own personal point of view.

      Hopefully they have it covered, but you will need to check.

      Good luck, Bob

  • Ali February 18, 2014, 11:37 am | Link

    hi Bob,
    I noticed nobody answered your question about Lamborghini Gallardo towing a Mustang 3800 Le Sportscruiser speedboat. You probably might have already got answer but for someone new I will answer it. If you are driving an expensive vehicle you should get comprehensive car insurance which covers damage to your car even when you are not at fault in an accident and the other vehicle is uninsured.

    • BobinOz February 18, 2014, 6:18 pm | Link

      Hi Ali

      Yes, you are correct, that is the answer. But there is a problem with that answer in my view.

      Of course, if someone is driving such an expensive car towing an expensive boat, you would expect them to have comprehensive insurance, but the reality is if the accident was not their fault, then it should really be paid for by the insurers of the person whose fault it was.

      If that person has no insurance other than that which came with their rego, then that’s not going to happen and I believe that’s wrong. In the UK we have a minimum requirement of “third-party insurance” and that covers any damage to other people and their belongings.

      If the guy with the expensive car and the expensive boat has to claim from his own insurance for damage caused by somebody else, then when he renews his insurance it will be even more expensive. That’s not right!

      Your answer is absolutely correct, the system is incorrect.

      Cheers, Bob

  • Tony May 16, 2013, 3:07 am | Link

    Thanks very much Bob!

    That helps a lot. We’ve got a lot of time until we’re planning on going so we can find out more information nearer the time.

    I’ll check out Bingle online so we can get a better idea.

    Thanks again!

    • BobinOz May 16, 2013, 2:49 pm | Link

      Cool, have a great time when you get here 🙂

  • Tony May 15, 2013, 4:23 am | Link

    Hi Bob.

    Me and three mates are planning on coming out to Australia next year.

    We’ve all got driving licenses and will all be over 21 years old, most of us with 3 years no claims here in the UK. Do you know if they take that in to account in Australia?

    Also will it be relatively cheap for us to get a car and all get insured on it?

    Any comments back will be very helpful. Love the site!

    • BobinOz May 15, 2013, 2:22 pm | Link

      Apparently, yes, you can have your no claims taken into account when you get here. The problem though is that you need a certificate from your insurer in the UK to prove you have three years no claims, and they will not issue you with one until you cancel your insurance with them. Then it takes them a few weeks to sort it out.

      If you want to stay insured right up until before you leave the UK for Australia, logistically that’s quite difficult to do. In the end, I didn’t bother, but I got insured here with a company called Bingle, (Google it, they are an online Australian insurance company) and they offered the best insurance deal for me even though I didn’t have any no claims.

      I have no idea how much your insurance will cost you for you and your mates, that really depends on the car.

      Cheers

      Bob

  • Geraldine May 9, 2013, 9:58 pm | Link

    Hiya Bob, yeah it was worth it probably due to the cars being German. They weren’t worth a fortune in the UKbut are worth more here. So factoring in all of the costs I’m glad we did it. Funny thing was as soon as I switched on the engine it was like an old friend had arrived and I was absolutely fine driving home. I’m getting used to merging on the roads and I’ve even been able to get my 18&22 yr old sons insured on it. That would have been too expensive in The UK.

    • BobinOz May 11, 2013, 1:00 am | Link

      That’s interesting Geraldine, I’m glad it has worked out for you and maybe I need to look into importing cars again, I’ve always thought it was too expensive with all the costs involved.

      If you love your car though, and it’s like getting an old friend back :-), then obviously it’s worth it. Cheers, Bob

  • Geraldine May 6, 2013, 4:48 pm | Link

    Hey Bob, well timed ! Just going to collect our cars having imported them from the UK. The garage told us that we need to arrange CTP before we drive to the rego office, we have arranged fully comp insurance anyway but the chap is instant that we have to buy this for the journey from the garage to the rego office…. I can honestly say there was more paperwork and more questions were asked for importing our cars than getting my OH registered as a GP. So tomorrow I collect my car….I haven’t driven on Oz roads yet. Good job Ive got my insurance sorted …just joking ha ha ha

    • BobinOz May 6, 2013, 11:57 pm | Link

      Yes, I’ve heard it’s quite a process importing a car into Australia. Was it worth it in the end, do you think?

      Anyway, glad my article helped explain CTP and I’m sure you’ll get the hang of driving here in Australia, at least we drive on the same side of the road that you’ve been used to. Thanks, Bob

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