Understanding car insurance: CTP, comprehensive and third party car cover explained
When choosing car insurance, it’s important to understand the types of cover to help you make an informed decision. In this article, we explain the differences between the three key products: CTP, third party property damage and comprehensive car insurance.
1. CTP insurance
Australian drivers need compulsory third party insurance (also known as CTP green slip in NSW) by law. CTP insurance covers personal injury claims arising from an accident you’ve caused.
In most states and territories, it’s automatically built into your rego costs. In New South Wales, Queensland, and South Australia, you can choose your insurer when taking out CTP cover.
CTP doesn’t cover car or property damage costs – that’s where comprehensive or third party property damage insurance comes in.
Related article: CTP explained – a state by state guide
2. Third party property damage car insurance
Third party property damage car insurance covers the legal liability that arises from damage to someone else’s vehicle or property caused by the use of your car.
It’s not CTP cover.
3. Comprehensive car insurance
Comprehensive car insurance offers the highest level of protection.
It covers accidental loss of, or damage to your car from incidents such as collision or impact, theft or attempted theft. You’ll also be covered for the legal liability arising from damage to someone else’s vehicle or property caused by the use of your car.
You can choose either a Market Value or Agreed Value policy.1
Market Value
This is the value of your car in your local area immediately before the incident. To determine the market value, the insurer will use recognised industry guides and consider the car’s make, model, age and kilometres travelled. They’ll also look at both factory-fitted and legal after-market modifications and accessories, and the general condition of your car.
Agreed Value
This is the amount you and your insurer agree to insure your car for, during the period of insurance shown on your certificate of insurance or policy schedule.
Deciding between comprehensive vs third party property damage car insurance
The policy you choose will come down to how much protection you need and the premium you’re willing to pay. Consider the value of your car, how you use it and who drives your car.
If you’d like to chat through your options, we’re here for you. At the heart of it, we’re here to help you find the right car insurance for your needs. Just call us on 133 723.
1 Dependent on underwriting criteria and the car being insured.
