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5 tips on understanding what your CTP does and doesn’t cover

Last updated on November 25th, 2021
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Your car not only takes you from A to B, but it is one of your proudest purchases you could ever make. Getting car insurance should be your second proudest moment, but this can be drowned out by the long-dribble of legalize that can leave you even more confused. Simply put, CTP is an insurance that provides compensation for people who have been injured or killed in a vehicle accident. Without this safe guard of insurance, you won’t be able to register your vehicle. We have boiled it down into 5 things that you as the car owner should know when it comes to what CTP does and doesn’t cover.

It will not cover your vehicle or others involved in the accident

CTP, which is also known as the green slip, is to protect you should you find yourself in an accident. Accidents are caused by various reasons. Survey statistics released by Keep Your Eyes On The Road showed that the top three reasons for accidents being caused were; intoxication (13.5%), falling asleep (11.5%), and fatigue (10.9%). Unfortunately, you cannot use CTP insurance to cover damages sustained by yours and the other parties’ vehicle during an accident, theft or damage to property. These will have to be completed with a certified car insurance broker who will offer you a separate cover to protect such damages. There is an array to choose from to match your car’s needs, and your budget without breaking the bank.

There is a reason why it’s called Compulsory

If you own a car, you need it. Regardless of which state you are in. Compensation in CTP insurance is not dependent on the means of whomever caused the loss. Rather, it insures that all people involved are compensated equally. However, if you have not yet been covered by CTP it can result in the compensation not being available to all parties who are entitled to some form of compensation. The last thing that you would want is the constant back and forth bickering of who wronged whom.

Know the difference between your C’s

At a glance Comprehensive insurance and CTP insurance could appear to be the same thing, but it is not. It’s like the difference between a peach and a nectarine, which at a glance look the same, but taste different. What these two insurances cover differ. Comprehensive car insurance covers you from any accidental loss, or damaged sustained to your vehicle up to the value you agreed to with your insurance company. It also only compensates you regarding the market value of your car, its make, model, age, and the condition in which it’s in. It could offer you the sum of up to $20 million to cover your legal liability if you happened to caused damage to another person’s property. The key difference is that CTP is that it’s compulsory, while Comprehensive insurance is optional.

It will not cost you an arm and a leg

CTP differs from state to state and therefore the cost will differ too. In some states you might find only one CTP underwriter, while in other states you will find multiple. It is advisable to compare CTP quotes, or you can use a CTP insurance to find a suitable price for you.

Is being insured with CTP worth it?

With this one, it is not something that you would want to compromise. You will not be only putting your own life at risk, but also other drivers. According to a report released by the Brotherhood of St Laurence (BSL), Australians are already forking out an extra $1.3 billion a year for uninsured motorists. That is $45 each. Without insurance you could foot a financially crippling bill and regret.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

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