If you’re gearing up to get behind the wheel in Australia, there are certain things you need to know to protect not only yourself but your car and everyone else joining you on the road.
That’s why drivers need to invest in Compulsory Third Party insurance, or CTP insurance, policies that protect you in the event of crashes with other vehicles or other people and don’t leave you susceptible to hefty fines and sole liability in the event of a dangerous or deadly accident.
What CTP Insurance Covers
If you have heard someone mention green slip insurance to you, they are talking about CTP insurance. These policies provide compensation for any third parties injured or killed if the insured vehicle is involved in an accident. This includes losses such as medical costs, rehabilitation costs, and loss of income. The amount of compensation can be determined by several factors.
The at-fault party’s CTP coverage will pay for damages in a covered event, including in blameless accidents brought on by an unavoidable circumstance and accident notification provisions. That means providing an early payment provision that will help to cover the loss of income. Keep in mind that the driver’s coverage at fault doesn’t usually get the same benefits as parties impacted by the accident.
CTP policies are not the same as comprehensive car insurance. That coverage should be purchased in conjunction with CTP to assure you’re insured for damage to your vehicle or any other vehicles or property involved in a wreck. Comprehensive insurance will also cover damage brought on by malicious damage, theft, or fire.
How CTP is Different in Each State
CTP stands for Compulsory Third Party. This compulsory insurance policy means that you cannot register your vehicle anywhere in Australia without having a policy in place. In most states, CTP is included with your registration. However, in New South Wales and Queensland, you must purchase a CTP policy as a separate step before renewing your registration.
Your annual fee covers your CTP premiums with the sole providers in each state in Western Australia and Victoria. In summary, your CTP insurance options are limited, depending on what state you’re in.
States also have different variables like fault, liability, and injury. Also, states have varying requirements for vehicle safety and identity checks to be satisfied before registration.
Calculating CTP Insurance Premiums
The price of CTP, or green slip, must fall within a certain price range as this coverage is mandatory. However, the exact price by an insurer is determined by assessing the risk level of a vehicle and its driver through multiple factors:
As mentioned, the state you are located in will impact the price of your coverage and what options you have in terms of insurers. The type of vehicle you drive will also affect just how much you’re paying. If your vehicle is being used for occupational purposes, that can impact your premium. For example, if you are looking into how to start an essential oil business, you may want to evaluate how much it will affect your insurance costs, as a business vehicle is deemed a higher risk since it is on the road for longer periods of time.
Your own personal history and risk factors will also have an impact on a CTP insurance quote, taking into mind things like:
- Your accident history
- Your age
- How old your vehicle is
- What other insurance coverages you have
The safer the driver you are, the better it will be for your bottom line to your premiums. It also helps to keep up that safety record, as many insurance companies provide discounts for drivers that avoid filing claims or involvement in claims.