CTP insurance Explained – And What It Covers

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If you ever need to file a claim, having car insurance can be helpful. Depending on the type of claim, it may save you thousands of dollars in out-of-pocket costs. Because of this, you should consider getting the appropriate kind of insurance immediately. Understanding the differences between Comprehensive Insurance, Motor Accident Injuries Insurance, and Compulsory Third Party (CTP) Insurance is a good place to start.

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CTP insurance
Credit: CTP insurance Regulator

The third party, which includes pedestrians, passengers, cyclists, motorcyclists, and drivers of other vehicles, is protected by CTP insurance, which pays for their medical treatment and care, which may last a lifetime, as well as any damages claims they may be eligible to file. 

Drivers are protected by Compulsory Third Party (CTP) insurance from the financial burden of causing injury or death due to a motor vehicle accident.

You must pay for both your motor vehicle registration and CTP insurance simultaneously. CTP insurance is required, just like vehicle registration.

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A CTP insurance policy or Green Slip primarily shields the driver of a motor vehicle from liability if they were to hurt or kill someone in a traffic accident. 

Check out other insurance tips here.

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What is CTP insurance?

In general, Compulsory Third Party (CTP) insurance covers your responsibility for injuries caused to passengers and other road users in an at-fault car accident, as does the liability of anyone who drives your car with your permission. For your vehicle to be registered, you must have CTP insurance.

How does CTP works

Third-party liability insurance, also known as a Green Slip, is required. It is required to register your vehicle in New South Wales.

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If you or anyone in your car causes an accident and injures someone, your Green Slip will cover the cost of their compensation claim. Other drivers, passengers, pedestrians, cyclists, and motorcycle riders are all covered. It does not cover the vehicle or property damage. You’ll need car insurance for that.

What does CTP insurance cover?

The Policy of Insurance protects you (and anyone else who uses your registered and insured vehicle, with or without your permission) from the financial consequences of causing injury or death to other road users while driving.

You are unable to file a claim if you were the sole cause of the accident. If unsure, you can file a claim with the insurer of the other driver you believe was at fault. Most accidents, however, involve some degree of fault sharing between drivers.

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Suppose a vehicle is unknown or unregistered (and thus uninsured for CTP). In that case, the Regulator will provide coverage under the Nominal Defendant Scheme and assign claim management to one of the CTP Insurers.

What is not covered by CTP insurance?

The Compulsory Third Party insurance does not cover the following:

  • damage to property (including a vehicle or its contents)
  • an injured driver who was entirely to blame for the collision
  • the driver of a single-vehicle accident, such as if you hit a tree or an animal (except for severe, lifelong injuries that may be covered under the Lifetime Support Scheme).

How to obtain CTP in different states?

The method for obtaining CTP varies by state. For instance, drivers in Victoria, Tasmania, Western Australia, and the Northern Territory pay for their CTP and registration at the same time, eliminating the need to select a provider or send in a separate payment. When you pay your registration fee in South Australia, you get to select an insurer.

CTP is a requirement for vehicle registration in Queensland. When you renew your registration, you can switch your CTP insurer. Although you can choose to change insurers at any time, the change will become effective after your next registration renewal.

When registering your vehicle with Access Canberra in the Australian Capital Territory, you must choose your Motor Accident Injuries (MAI) Insurance provider.

What will happen if I do not have CTP Insurance?

CTP insurance is required and must be purchased along with your vehicle registration. Suppose an accident happens involving an unregistered vehicle. In that case, the car will also not be covered by CTP insurance. The driver and owner may ultimately be financially responsible for any losses paid to the injured person. Furthermore, owners and drivers of unregistered vehicles face high fines.

Conclusion

Every state and territory has made it a legal requirement. CTP insurance protects you from financial liability if you cause a motor vehicle accident that injures a third party, such as passengers in your vehicle, other drivers and their passengers, cyclists, and pedestrians.

If you find this article helpful, kindly comment in the comment section below.

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