Insurance is one of those things most people know they need, yet prefer not to think about until they have to. It’s OK, we know that.
We also know the different types of insurance can be a bit confusing, especially when it comes to car insurance. If you have a car, or are planning on getting one, you need to think about car insurance.
There are two main types of insurance for motor vehicles, and many people aren’t sure which one does what. We can help, with this quick rundown on the difference between Compulsory Third Party (CTP) insurance and Car Insurance – both of which you’ll need.
Compulsory Third Party Insurance, or CTP, is a mandatory insurance you purchase before you are able to register your car. Also known as a Green Slip, your CTP Insurance protects people who are injured in an accident if you are at fault.
If another person (the third party, such as the driver of the other vehicle, a cyclist or a pedestrian) is injured in a road accident that is your fault, your CTP Insurance means they can access medical treatment and, if relevant, income support. Those who sustain serious injuries are entitled to ongoing care and the support they need to recover.
Your NRMA Green Slip also helps you if you’re injured in the accident. NRMA’s CTP Green Slip offers Driver Protection Cover if you’re at fault so you can get the medical attention you need to get better, too.
What if it’s not my fault?
CTP Insurance means that anyone who is injured in a road accident, regardless of fault, will have access to medical treatment and income support for up to six months. Those not at fault with serious injuries are entitled to ongoing care and support for over six months, to help them get better.
The other on-road insurance is Car Insurance, which comes in three types of policy:
Third Party Property Damage
The basic cover every car owner should consider is Third Party Property Damage, which protects you if you are at fault in an accident and damage someone else’s car or property.
Even if your car isn’t worth a lot in resale value, and you don’t feel the need to cover it for repairs or replacement, if you have a crash with another car you are responsible for their repair costs.
Consider this example: Approaching an intersection, the lights change and the luxury SUV in front of you brakes heavily. You don’t react in time and run into the back of it. This has a knock-on effect and causes the car you hit to bump forward into another car.
Because you hit the SUV, you are at fault. You are now responsible for the other two parties’ repair costs, as well as your own.
If you have Third Party Property insurance, it will pay for the repair or replacement of their damaged items. If you don’t, you are personally responsible for these costs.
Third Party Fire and Theft
For extra peace of mind, you also have the option to take out Third Party Fire and Theft, which covers you for damage you may do to someone else’s car, and also covers you to a set extent for fire damage to your car, and for theft or attempted theft.
Comprehensive Car Insurance
This is, as its name suggests, a more inclusive insurance, as it covers you for damage or theft of your car (and generally, things in your car), in addition to any third party damage. The important thing to know is that this cover pays for the repair or replacement of your items.
When you take out Comprehensive Car Insurance with NRMA, your policy includes the following:
- Collision or crash
- Theft, vandalism, accidental damage
- Partner Repairer network
- Fire, storm, flood
- Hire car after theft or attempted theft
- Hire car after a not at fault collision or crash
- Emergency repairs
- Earthquake, explosion, tsunami
- New replacement vehicle
- Personal items
- Baby capsule or child seat
- Tools of trade
- You can also take out additional cover for extras if you choose to, for things like glass repairs, hire cars after an accident and no-claim bonus protection.
While car insurance isn’t mandatory, it’s important to know that if you don’t have car insurance and you have an accident where you’re at fault, you are responsible for all parties’ costs for repairs and replacement.
Overall, the main thing to remember when it comes to the difference between CTP and Car Insurance is this: CTP insurance is for people. Car insurance is for property.
Here to help
NRMA has been helping Australians get on the road for over 90 years. Help is who we are, so jump online to get a quote on your car insurance or CTP insurance with NRMA.