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CTP (Compulsory Third Party) Insurance and Green Slips Explained
Compulsory third party insurance, also known as CTP or Greenslip insurance, is liability insurance that covers injuries or death of another person while you are driving. If you are legally liable for someone else's injuries from a vehicle accident, CTP will take care of their personal injury claim.
Green slip cover is important because it protects other people that you might harm, whether the accident is caused by your distraction, falling asleep behind the wheel, or recklessness. It also protects you, as the driver or owner of the vehicle, because it keeps you from paying personal injury claim money from your own pocket. In addition to this type of cover being a good idea, in two states having this policy is the law.
Who is a potential candidates?
By law, drivers in New South Wales and Queensland are required to obtain compulsory third party insurance (hence the â€œcompulsoryâ€� part of the name). You must get a CTP policy / green slip in order to register or re-register a vehicle.
Only six companies are qualified to offer CTP and green slips in Queensland (RACQ, NRMA, Allianz, AAMI, Suncorp and QBE) and seven are authorized to offer CTP insurance and greenslips in New South Wales (Zurich, QBE, NRMA, GIO, CIC Allianz, Allianz, and AAMI).
What typically does a CTP policy / green slip cover?
Compulsory third party comes into play when you are at fault in a vehicle accident, whether as the driver or as the owner of the car. CTP will cover injuries and death for:
- Anyone riding in the vehicle with you
- Anyone else involved in the accident, from drivers and passengers of other vehicles to pedestrians
- Anyone injured by a trailer you may be towing at the time of the accident
As of October 1, 2006, a new benefit was incorporated into new or renewed CTP policies for drivers in New South Wales. This benefit is called the Lifetime Care and Support Scheme (LTCS), and it is designed to cover any childâ€”age 16 or youngerâ€”that is seriously injured in a vehicle accident, whether you are at fault or not. The idea is to make sure an injured child has all the medical care they need no matter who caused the accident. If the child suffers a life-long injury, such as needing a wheelchair or other lifetime care, this new benefit will take care of their medical needs and support for the remainder of their life.Â
What typically does a CTP policy / green slip not cover?
If you are at fault in the accident, CTP will not cover your personal injuries. It also does not cover damage you might cause to other vehicles or property.
Additional coverage that green slip policy holders might need in this area
Carrying a third party property damage policy is a very good idea. This policy will take care of claims if your vehicle damages property or another vehicle in an accident. Even if your car is a hunk of junk that isn't worth carrying a comprehensive policy on, you'll want to carry protection for third party damage. Otherwise, you'll find yourself paying for the other driver's fender on your own. This type of policy often covers fire and theft damage to your vehicle as well.
While additional cover options are not offered in the CTP policy, many people bundle their CTP with comprehensive car insurance from the same company to get a discount on premiums.
What will it typically cost?
Many things determine how much you will pay for your green slip, such as your driving record, your age, the type of vehicle and its age/condition, and the zone where your car is garaged. Different postal codes carry different premiums for CTP insurance because the risk assessment is different for each area. For example, drivers garaging their vehicle in downtown Sydney may pay a higher premium than those living beyond city limits. The Motor Accidents Authority (MAA) is responsible for assessing the motor vehicle accidents and risk in each postal code.
There are many ways you can save money on your greenslip, as prices can vary drastically between the few companies that offer CTP policies. Business fleets of more than five cars often qualify for discounts on CTP premiums. You can review the MAA's free green slip price estimator here
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