Is car insurance compulsory in Australia?

There is one type of car insurance required by law in Australia: compulsory third party (CTP) insurance.

All vehicles in Australia must have CTP insurance before they can be registered and legally driven on the road.

Who is the ‘third party’?

CTP insurance involves three parties:

  • First party: the driver of the vehicle ‘at fault’
  • Second party: the CTP insurer of the vehicle at fault
  • Third party: the person injured or killed in the accident.

What does compulsory third party (CTP) insurance cover?

CTP insurance protects you against compensation claims made against you (or the driver of your car) if you are wholly or partly at fault for injuring or killing other drivers, passengers, motorcyclists, pedestrians, and/or cyclists in an accident.

Instead of you paying the compensation – including treatment, rehabilitation and care costs and, if necessary, income support payments and funeral expenses – your CTP insurer pays it.

Similarly, if you’re injured or killed in an accident caused by someone else, you or your dependents can claim compensation from that person’s CTP insurer.

CTP insurance does not cover damage to your car and other people’s property (e.g. their car and home).

For more information, contact the CTP insurance regulator/administrator in your state/territory.

How do I pay for CTP insurance?

Depending on which state or territory you live in, your CTP insurance premium is paid either  as part of your car registration fee or separately.

Who can claim personal injury compensation?

If you’re injured in a motor vehicle accident and can show someone else was partially or completely at fault, you can make a claim for personal injury compensation.

Any injured road user can make a claim, including drivers, passengers, cyclists, motorcyclists and pillion passengers.

If you were partly at fault for causing your injuries (e.g. you were speeding or not wearing a seatbelt), you can still claim, however your compensation may be less than if you were blameless.

What if I’m injured in a car accident I cause?

If you’re injured or killed in an accident that was partially or wholly your fault and depending on which state or territory you live in and/or your CTP insurer, you or your dependents may be able to claim compensation.

For example, some insurers provide ‘at-fault driver cover’ for specified injuries and death.

If you’re unable to claim compensation, you’ll have to rely on sick leave, unemployment benefits, Medicare and/or private health insurance, and – if you have it – income protection or life cover.

If I have only CTP insurance and I cause an accident, will I have to pay for the repairs to the other person's car?

Yes – in most cases you’ll be required to pay for:

  • the reasonable cost to repair the other person’s damaged vehicle or the market value of the vehicle (whichever is the smaller amount)
  • towing costs
  • demurrage (hire-car costs, lost wages or profits for income-earning cars).

You can avoid these hefty costs by taking out Budget Direct third party car insurance or comprehensive car insurance (which also covers damage to your car).

What if I don’t have CTP insurance?

Your CTP cover expires at the same time as your car’s registration.

If you forget to renew your registration and your unregistered car is involved in an accident resulting in injury or death, you can be sued for a lot of money (not to mention the fines you’d face for driving an unregistered car).

Can I choose my CTP insurance provider?

In some states and territories, there is only one approved provider of CTP insurance, while other jurisdictions allow you to choose from several different providers:

State/territory

Can I choose my CTP provider?

Australian Capital Territory

Yes

New South Wales

Yes

Northern Territory

No

Queensland

Yes

South Australia

Yes

Tasmania

No

Victoria

No

Western Australia

No

Who regulates/administers CTP insurance in my state/territory?

The following bodies regulate or administer their respective state or territory’s compulsory third party (CTP) insurance scheme:

State/territory

Regulator/administrator

Australian Capital Territory

ACT Treasury Department

New South Wales

State Insurance Regulatory Authority

Northern Territory

Territory Insurance Office

Queensland

Motor Accident Insurance Commission

South Australia

Compulsory Third Party Regulator

Tasmania

Motor Accidents Insurance Board

Victoria

Transport Accident Commission

Western Australia

Insurance Commission of Western Australia

Does Budget Direct offer CTP insurance?

Yes, but only on vehicles registered in New South Wales.

New South Wales CTP Insurance

What factors affect the price of my NSW CTP, or green slip, insurance?

The main factors that determine the price are the type and age of your car, how it’s used and where it’s garaged; and your age, driving history and claims history.

CTP prices can vary considerably between different insurers. If you’re shopping around for the best price on CTP insurance, why not compare and see if you could save with Budget Direct?

How quickly after getting my NSW CTP insurance will I be able to register my car?

We’ll notify Roads and Maritime Services (RMS) electronically when you purchase your green slip, even if you’re registering the car for the first time.

Please allow one hour for the notification to go through.

You no longer need to present a hard copy of the green slip receipt.

Does my NSW CTP insurance cover me if I drive interstate?

Your CTP green slip insurance covers you no matter where you drive your car in Australia.

How long is my NSW CTP insurance effective for?

You can buy green slip cover for six or 12 months.

How do the CTP green slip reforms, that started on 1 December 2017, affect me?

For information on the NSW Government's reforms to the state's CTP green slip scheme, please visit the State Insurance Regulatory Authority website.

Get a car insurance quote online