What is CTP?
Compulsory third party (CTP) car insurance is a regular and compulsory feature for all car owners in Australia. No car is registered unless CTP car insurance is done. Compulsory Third Party (CTP) car insurance protects you from legal and medical costs stemming out of the injuries and deaths caused by car accidents.
CTP insurance may vary in each state and territory in Australia as each state and territory has its own rules and regulations. CTP is usually included in the cost of your vehicle’s registration depending on the type, age and performance characteristics of vehicle being registered as well as driving history and claims history of the driver.
There are many companies that offer CTP car insurance in Australia and the cost of CTP insurance varies from company to company; based on protective cover for your own injuries caused if you are at fault. CTP, mandatory with every registered car, will cover for the liabilities incurred for injuries cause by you to other road users due to vehicle accident anywhere in Australia.
This includes injuries caused to your passengers, drivers and passengers of other vehicles, pedestrians, cyclists, motorcyclists and pillion passengers. CTP also covers injuries caused due to the trailer attached to a registered vehicle.
Although it is not necessary or mandatory in Australia, having another additional insurance like Comprehensive or Third Party insurance for your vehicle can prove beneficial in the longer run.
Why to purchase other additional motor vehicle insurance?
Here, it is important to understand the difference between CTP and other types of motor vehicle insurance. As a fact of matter, Compulsory Third Party (CTP) insurance covers injuries caused by your vehicle to other road users.
However, CTP does not cover the damage to your vehicle, other vehicles or property. Also, it neither covers theft of your vehicle or its contents nor does it cover your legal liability. In the event of an accident, vehicle owners will be at a greater risk of financial and personal loss.
If you purchase an additional type of car insurance along with your CTP insurance cover, such as Comprehensive, Third Party Property or Third Party Fire and Theft, you can be saved from substantial financial loss.
Premiums for car insurance
Although every private insurance company has its own way of calculating premium yet more often than not, the premiums are calculated on the basis of:
- Make and model of vehicle
- Modifications made in the vehicle
- Age of vehicle
- Type of insurance cover chosen
- Age and Driving record of driver
- insurance history of drivers
- Use of vehicle i.e. commercial or private
- NBC i.e. No Claim Bonus
In addition, insurers also consider the location where the car is stored overnight or during the day and your option for a market or agreed value for your vehicle
Your premium increases when you desire to access add-ons such as Zero-Depreciation cover, Engine cover or cover for accessories etc. By and large, Car insurance policies are typically 12-month agreements and need to be renewed before the expiry date so as to avoid penalties and discontinuation of policy.
When you are with iSelect, you need not bother about transparency about premium amount, renewal date and claims. You can find more about the required insurance at iSelect.com.au/car