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How to understand CTP insurance

ctp care

Did you know you need compulsory third party (CTP) insurance to register a vehicle in Australia? It protects you from financial loss if your vehicle is involved in a road crash causing injury or death to yourself, other drivers, passengers or pedestrians. That’s why it’s important to understand CTP insurance.

Table of contents

  1. What does CTP cover? ›
  2. Why is CTP compulsory? ›
  3. Who is the third party? ›
  4. Do I still need comprehensive insurance? ›
  5. Who receives the CTP premium? ›
  6. Is CTP the same all over Australia?›
  7. How does the CTP scheme work in my state or territory?›
  8. How does CTP insurance work in NSW?›
  9. How does CTP work in the ACT? ›
  10. How does CTP work in the NT?›
  11. How does CTP work in Qld?›
  12. How does CTP work in SA?›
  13. How does CTP work in Tasmania?›
  14. How does CTP work in Vic?›
  15. How does CTP work in WA?›
  16. Summary of how to understand CTP insurance›

1. What does CTP cover?

CTP insurance provides compensation for people who are injured or killed when your vehicle is involved in an accident. As the vehicle owner, you are protected against any claims against you for the damage and losses that were caused. Your CTP covers other drivers, passengers or pedestrians who are injured or killed in an accident involving your vehicle. CTP schemes in some states and territories cover the at-fault driver as well.

Note, CTP does not cover any property damaged in the accident, such as your vehicle, the other driver’s vehicle or any structures. You need comprehensive insurance for this.

2. Why is CTP compulsory?

CTP insurance is compulsory for one good reason. Everyone can potentially receive compensation, regardless of whether the at-fault driver has the means to pay it. Without mandatory CTP, compensation would not be available equally to all parties who are entitled to it after a road accident.

3. Who is the third party?

The third party is the person who is injured or killed in a road accident. Essentially, there are three parties to CTP insurance:

  1. First party is the owner or driver of the “at fault” vehicle
  2. Second party is the CTP insurer of this vehicle
  3. Third party is the person who is injured or killed.

While CTP refers to third party, it is not the same as third party property insurance. This refers to insurance that covers the property of third parties, eg, someone else’s vehicle. Third party property insurance is not compulsory.

4. Do I still need comprehensive insurance?

Yes. Comprehensive insurance covers damage to your vehicle and others’ vehicles and property, but does not cover people. CTP is for people only and does not cover damage to any vehicles that belong to you or someone else.

Some people believe comprehensive insurance covers everything and so it must cover CTP as well. This is false.

Most CTP insurers also offer comprehensive and third party property insurance. Other insurers who don’t offer CTP insurance may offer third party property and comprehensive insurance. Comprehensive insurance is not compulsory and is always your choice.

5. Who receives the CTP premium?

The insurer or government body that underwrites the CTP scheme receives all insurance premiums. The insurer or underwriter also pays out any claims on that insurance.

In NSW, vehicle owners pay their premium direct to the insurer. However, in the rest of Australia, they pay a registration fee to the transport authority. Then the CTP portion of the registration fee goes to the insurer or underwriting body.

6. Is CTP the same all over Australia?

No. Each state and territory in Australia has its own CTP scheme. However, your CTP policy covers you throughout Australia, whatever your home state or territory.

CTPs schemes differ in:

  • Who provides insurance
  • Who provides regulatory oversight
  • Benefits available under the schemes
  • Whether they cover drivers at fault.

For example, some states and territories have one government insurer and others have private insurers.

7. How does the CTP scheme work in my state or territory?

The rules are different for CTP and registration depending on where in Australia you live. States vary on the basis of many factors, including fault, liability, injury and compensation available. They also have different requirements for vehicle safety and identity checks before you can register your vehicle.

  Is CTP included in rego? Regulator or choice of insurer? Who are the insurers? Is it a fault-based scheme?*
NSW Separately before you can register Choice of 6 insurers AAMI, Allianz, GIO, NRMA Insurance, QBE, Youi Partly fault-based
ACT Part of registration fee Choice of 4 insurers AAMI, APIA, GIO, NRMA Insurance Not fault-based
NT Part of registration fee Regulator Government Not fault-based
Qld Part of registration fee Choice of 4 insurers Allianz, QBE, RACQ, Suncorp insurance Fault-based
SA Part of registration fee Choice of 4 insurers AAMI, Allianz, QBE, SGIC Fault-based
Tas Part of registration fee Regulator Government Not fault-based
Vic Part of registration fee Regulator Government Not fault-based
WA Part of vehicle licence fee Regulator Government Fault-based

*What does fault-based mean?

  • If the CTP scheme is fault-based, the amount of compensation will depend on whether the accident was your fault
  • If the CTP scheme is not fault-based, you can receive compensation whether you are at fault or not.

8. How does CTP insurance work in NSW?

The CTP scheme in NSW is not like other Australian states and territories because you must pay separately for CTP before you can register your vehicle.

Six insurers offer CTP insurance (also known as green slips) in NSW:

  • AAMI
  • Allianz
  • GIO
  • NRMA Insurance
  • QBE
  • Youi

State Insurance Regulatory Authority (SIRA) is the CTP regulator. It monitors the performance of CTP insurers and releases a quarterly report of what you can expect  from your insurer if you make a claim. Insurers set green slip prices and have to submit them at least once a year to SIRA. SIRA can reject them if they do not meet the guidelines.

A reformed NSW CTP scheme started on 1 December 2017. It created a safety net for all injured road users, whether at fault or not. For 6 months, they can receive benefits to cover loss of income and the cost of medical treatment and care. If not at fault, benefits are available for more than 6 months.

Those with more serious injuries can make claims for lump sum compensation. There is also a Lifetime Care and Support Scheme for those with catastrophic injuries.

Why do prices vary?

The price of CTP varies according to your:

  • Geographic region or postcode
  • Type and age of vehicle
  • Demerit points
  • Distance travelled
  • Age of vehicle owner
  • Age and gender of youngest driver
  • Driving history
  • Claims history.

In NSW, where you live is particularly important. There are five rating regions: Metropolitan, Outer Metropolitan, Newcastle and Central Coast, Wollongong, and Country. They are based on the risk of someone in that region having an accident and making a claim. A few postcodes are split between two.

  • A 30-54 year old in NSW, for example, with an average 10-year old car could pay $433 in Metropolitan, $287 in Newcastle or Central Coast and $324 in Country
  • A Queenslander with a regular car pays $344, no matter where they live.

This is why postcode is one of the important factors in the price of a green slip.

To register a vehicle in NSW, you may need a pink slip. A pink slip is a check of your vehicle’s roadworthiness. Most vehicles under 5 years old or less do not need a pink slip. However, older vehicles cannot be registered without having a current pink slip from an authorised mechanic.

If you are ready to register a vehicle in NSW, use the greenslips.com.au calculator to find all CTP greenslip prices.

9. How does CTP insurance work in the ACT?

In the ACT, all vehicle owners pay for CTP insurance as part of their registration fee. Four insurers are licensed to provide CTP in the ACT:

  • AAMI
  • APIA
  • GIO
  • NRMA

ACT insurers set their own premiums. Before changing their prices, insurers must submit them to the regulator for approval. The regulator is the Motor Accident Injuries Commission. The regulator oversees insurer activities and road safety measures and makes sure injured people receive speedy treatment.

Until recently, the ACT had a common law, fault-based CTP scheme. Under the new 2020 scheme, someone at fault can claim benefits if they are injured in a road accident. They can also make a claim if it was nobody’s fault, for example, an accident with a kangaroo.

How much you receive depends on the type, extent and circumstances of the injury. Those with serious injuries can claim for damages. The Lifetime Care and Support scheme provides lifetime care for people with catastrophic injuries from crashes.

A roadworthy inspection is not usually required.

However, your vehicle needs a roadworthy inspection from an approved inspection station:

  • For the first registration in the ACT
  • When registration has expired for over 12 months
  • When transferring from interstate
  • If the vehicle is over 6 years old when ownership is transferred
  • For defect clearances
  • If it is a heavy vehicle over 4.5 tonnes, taxi, bus or hire car.

In the ACT, the premium for a class 1 passenger vehicle is the same, regardless of geographic location, age, driving record or claims history. Premium prices are for 12 months and vary only with class of vehicle and type of use. One is for private use (not claiming for GST) and one is for business use (claiming for GST).

You can find ACT premiums for your vehicle here.

10. How does CTP insurance work in the NT?

All vehicle owners who register in the NT pay for CTP as part of their registration fee. The Territory Insurance Office (TIO), a division of Allianz, is the only provider of CTP insurance in the NT. This means you can’t choose an insurer.

The Motor Accidents Compensation (MAC) scheme is a no-fault CTP scheme. This means you don’t have to prove fault to make a claim. But a driver affected by alcohol or drugs, unlicensed, or involved in reckless conduct may receive less compensation.

The MAC scheme provides a range of benefits, including compensation for medical and hospital care, rehabilitation services, loss of limbs and loss of earning capacity.

Older cars on the road need a roadworthy inspection from an authorised inspector at 5 and 10 years and then every 12 months to renew registration.

Prices for registration in the NT depend on whether you register for 1, 3, 6 or 12 months, type of vehicle (including electric cars) and engine size. You can find all NT registration fees here.

11. How does CTP work in Qld?

All vehicle owners in Qld pay CTP insurance as part of their registration. You can choose from four licensed CTP insurers:

  • Allianz
  • QBE
  • RACQ Insurance
  • Suncorp.

Queensland has a common law, no-fault scheme. The Qld CTP scheme pays compensation according to the type and extent of injury but you may receive less if you were partly at fault. You might need to prove in court that another driver was negligent.

Someone seriously injured in an accident in Qld may claim lifetime treatment, care and support under the National Injury Insurance Scheme (NIIS).

The Motor Accident Insurance Commission (MAIC) oversees the Qld CTP scheme. Its tasks are to keep premiums affordable, regulate insurer activity and make sure people in road accidents are compensated.

Registration includes an NIIS levy and an MAIC levy.

Vehicle owners need to get a safety certificate (vehicle inspection) if they want to:

  • Sell a registered light vehicle
  • Register an unregistered vehicle
  • Transfer registration to Qld from interstate
  • Transfer to another owner.

Qld CTP insurers set their own prices within guidelines set by the MAIC. They are based on the period of registration, class of vehicle and whether it is for private or business use. Qld prices for 1, 3, 6 or 12 months are here.

12. How does CTP work in SA?

Vehicle owners in SA pay for CTP as part of the registration fee. Since July 2019, four private insurers offer CTP in SA:

  • AAMI
  • Allianz
  • QBE
  • SGIC

Before choosing an insurer, vehicle owners can check insurer ratings. Ratings are based on customer surveys of how well insurers handled claims during the previous 6 months.

The SA CTP scheme is a common law fault-based scheme. This means you can claim benefits under the scheme if you are injured in a road crash and can prove another driver was at fault. Even so, drivers who are 25% at fault may have to pay an excess.

The Lifetime Support Scheme (LSS) covers people who suffer serious lifelong disabilities in car accidents. The Lifetime Support Authority (LSA) runs the scheme and funds it with an LSS levy on registration.

You do not need a roadworthy inspection to register most vehicles in SA, except when they have defects, are modified or written-off. However, you need to have your vehicle identified if transferring registration from another state.

Registration fees depend on:

  • Period of registration (1, 3 or 12 months)
  • Class of vehicle – passenger, goods carrying, motorcycles etc
  • Whether vehicle is garaged in District 1 (metro) or District 2
  • Whether or not you claim GST.

You can calculate your premiums and your results will include current claimant service ratings for each SA insurer.

13. How does CTP work in Tasmania?

CTP is included in the registration fee in Tasmania. Motor Accidents Insurance Board (MAIB) is the Tasmanian government insurer so there is no choice of insurer.

In Tasmania, the CTP scheme is a no-fault scheme. This means you can claim medical and income benefits after an accident whether it was your fault or not. Even so, injured people can still sue for damages under common law if they can prove that the accident was somebody else’s fault.

Benefits payable under the scheme include reasonable medical costs, ambulance transport, hospital treatment, loss of income, funeral expenses and death benefits.

MAIB’s Long Term Care program provides lifetime care to people who are seriously injured in a road accident.

In Tasmania, you do not need a vehicle routinely inspected each time you renew registration. However, you will need a vehicle inspection at an authorised inspection station when:

  • Tasmanian registration has expired for 3 months or more
  • You want to transfer registration from another state to Tasmania
  • Your vehicle has a defect notice
  • It is the first registration of this vehicle in Australia.

The Tasmanian Economic Regulator carries out regular, independent reviews of CTP premiums. Registration fees depend only on the class of vehicle. You can choose the period of registration for light vehicles (6 or 12 months) or heavy vehicles (3, 6 or 12 months).

Tas registration fees are here.

14. How does CTP work in Vic?

All vehicle owners in Victoria pay for CTP as part of their registration fee. The Transport Accident Commission (TAC) provides insurance and there are no private insurers.

The Victorian CTP scheme is a no-fault scheme. This means people who are injured in a road accident can still claim medical benefits under the scheme, even if it was their fault. Compensation includes the reasonable cost of medical treatment, rehabilitation, disability services, income assistance, travel and household support.

In Victoria, you don’t usually need a roadworthy inspection to renew registration. This is called a Certificate of Roadworthiness. You do need one from a licensed vehicle tester when you:

  • Sell a vehicle
  • Register a used vehicle after registration was cancelled (3 months after expiry)
  • Clear a vehicle defect.

The CTP premium shows on your registration bill as TAC premium or TAC charge. How much you pay for your premium depends on:

  • Period of registration – 3, 6 or 12 months
  • Type of vehicle
  • Your postcode– metro, outer metro or rural (risk zones)
  • Whether or not you claim a concession.

You can calculate Vic registration fees here.

15. How does CTP work in WA?

The cost of CTP insurance is included in the WA vehicle licence fee. In WA, vehicle registration is usually called a vehicle licence but may also be called rego.

The Insurance Commission of Western Australia (ICWA) provides CTP insurance and there are no private CTP insurers. Its role is to review and set premiums each year and to manage CTP claims effectively.

In WA, the Motor Injury Insurance Scheme (MIIS) is a fault-based scheme. If it was not your fault, the scheme covers your claim for injuries caused to someone else in a road accident. If it was your fault, it does not cover your injuries unless they are catastrophic. The Catastrophic Injuries Support Scheme covers these types of injuries.

You don’t routinely need a roadworthiness inspection to renew a vehicle licence in WA. However, you must book a vehicle check with an approved inspection station when:

  • You want to license (register) your vehicle for the first time in WA
  • It has a yellow defect or compliance notice
  • It is a modified vehicle
  • Your type of vehicle needs an annual examination (bus, taxi, hire car).

The CTP insurance part of a vehicle licence is based on the type of vehicle and the primary purpose for which it is used. Light vehicle licences can be renewed for 3, 6 or 12 months.

Find all WA licensing fees here.

16. Summary of how to understand CTP insurance

CTP stands for Compulsory Third Party insurance. It provides compensation for people who are injured or killed if your vehicle is involved in an accident. While CTP schemes are different in each state and territory, you are covered all over Australia. Remember, CTP covers people only, not property. You need comprehensive insurance to cover any property damaged in an accident, such as your vehicle.

If you are looking for CTP in NSW, you can compare prices here.

author image

Corrina Baird

Writer and Researcher, greenslips.com.au

Corrina used to lend her car to her kids and discovered what Ls, Ps and demerits mean for greenslips. After 20 years in financial services and over 8 years with greenslips.com.au, she’s an expert in the NSW CTP scheme. Read more about Corrina

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