Things you need to know about CTP!

Every person who registers a car needs to get insured with compulsory third party (CTP) insurance. Even though it is mandatory, in a recent survey of car owners nearly half the respondents believed their CTP included damage to a person else’s vehicle. Around 37% of participants wrongly thought CTP insurance could offer coverage for damage to a person else’s belongings.

It is high time to get the facts straight about CTP. This article debunks some common myths about it.

• As mentioned above, many Australians believe that CTP provides coverage for damage caused to their car and injuries it causes to others. In reality, CTP compensates any third parties injured in a car accident for medical treatment they need due to that event. CTP safeguards you from having to pay claims made against you if you injure someone on the street, for example. Reimbursement of third parties’ medical costs can be an extremely pricey matter, and CTP coverage ensures that this does not come out of your pocket. CTP does not cover any car damages. If you want to get your car insured for damage caused to it in an accident, or be insured in case your car causes damage to others’ cars or property, you need to go for comprehensive car insurance.

• It is often a misconception that the level of cover is the same in every state of Australia, however, CTP insurance works differently in different states. For example in Tasmania and Victoria, it’s a package deal at the time of purchasing your car. Insurance and cars are tacked together, so you don’t have to think about it twice. However, in New South Wales while buying a car, you have to get CTP insurance separately. The terms of this insurance also vary from one state to another. So it is always good to familiarise yourself with the CTP insurance guidelines that apply to you.

• The ‘pink slip’ and ‘green slip’ vernacular can be confusing, but it is essential to remember that they are not the same. A green slip is just another name for the CTP coverage that all vehicle proprietors need to pay each year. Whereas a pink slip is what you need from a mechanic to prove your car is roadworthy every year before you register it again. Having your pink slip doesn’t imply you don’t need your green slip! Ensure that you follow your green slip checklist each year when you renew your registration.

Don’t forget CTP is not the same as car insurance. The latter is something you need to shop for separately on top of it, if you decide you need the additional coverage. Compare car insurance coverage can fill in for much of the damage which won’t be covered by CTP coverage. This includes damage to your car or damage it causes to others’ cars and property, vehicle theft and harm to your vehicle because of attempted robbery, as well as damage caused by weather events. In the 21st century, you can find all the essential things online. So, do your research, talk to your local insurer and then make an informed decision.