How Compulsory Third Party (CTP) Insurance Works in Australia

Key Takeaway

Compulsory Third Party (CTP) insurance, known as a green slip in New South Wales, is mandatory insurance that covers personal injury compensation to other people if you cause a car accident. You must have valid CTP insurance to register your vehicle in Australia. CTP does not cover property damage, damage to your own vehicle, or your own injuries, which is why many drivers also purchase comprehensive or third party property car insurance.

What Is CTP Insurance?

Compulsory Third Party (CTP) insurance is a legally required form of personal injury insurance in Australia. It provides compensation to people injured or killed in motor vehicle accidents where you are at fault. According to ASIC MoneySmart, CTP insurance is built into your vehicle registration process and protects other road users, including drivers, passengers, pedestrians, and cyclists (MoneySmart, 2026).

The name varies by state and territory. In New South Wales, it is commonly called a green slip. In other jurisdictions, it may be referred to as CTP insurance, compulsory third party insurance, or motor accident insurance.

What You Will Learn

This guide explains how CTP insurance operates in Australia, what it covers and excludes, how to purchase it, what affects your premium, and how it differs from other types of car insurance. You will understand why CTP is mandatory, how to make a claim, and common mistakes to avoid when buying or renewing your cover.

How CTP Insurance Works: Step by Step

1. Understand What CTP Insurance Covers

CTP insurance covers compensation for personal injuries caused to other people in an accident where you are at fault. This includes:

Medical and hospital expenses for injured parties
Rehabilitation and ongoing care costs
Loss of income for injured parties unable to work
Pain and suffering compensation
Funeral expenses in fatal accidents

The cover applies regardless of who is injured, including drivers of other vehicles, passengers in any vehicle, pedestrians, motorcyclists, and cyclists.

2. Know What CTP Insurance Does Not Cover

CTP insurance has important limitations. It does not cover:

Damage to your own vehicle
Damage to other people’s vehicles or property
Your own injuries if you cause the accident
Injuries to other people when someone else is at fault
Damage caused intentionally or while driving under the influence (cover may be denied or reduced)

For these risks, you need separate car insurance such as comprehensive cover, third party property damage insurance, or third party fire and theft cover.

3. Purchase CTP Insurance When Registering Your Vehicle

You must purchase CTP insurance before you can register or renew the registration of your vehicle. The process varies by state and territory:

In New South Wales, you obtain a green slip from a licensed CTP insurer before paying your registration.
In other states and territories, CTP insurance is typically included automatically in your vehicle registration fee, and the relevant state authority manages the scheme.

You can compare CTP insurers and premiums through state government websites or directly through licensed insurers. Some states allow you to choose your insurer, while others operate a single scheme.

4. Understand What Affects Your CTP Premium

Your CTP premium depends on several factors:

Location: Where you register and mainly drive your vehicle affects the premium, as accident rates vary by postcode and region.
Vehicle type: The make, model, and age of your vehicle influence the cost.
Driver age and driving history: Younger drivers and those with traffic offences or accident history typically pay higher premiums in states where these factors are considered.
Scheme structure: Each state and territory has its own CTP scheme with different pricing models.

In New South Wales, you can choose between insurers and premiums vary. In some other jurisdictions, premiums are set by the state scheme. As of July 2026, verify current premium structures and factors with your state authority or licensed insurer before purchasing.

5. Make a Claim If You Are Injured

If you are injured in a motor vehicle accident caused by another driver, you can make a CTP claim against that driver’s insurer. The process generally involves:

Seeking medical treatment immediately and keeping records of all expenses and diagnoses.
Notifying the at-fault driver’s CTP insurer as soon as possible, usually within six months of the accident.
Providing medical evidence, proof of lost income, and other supporting documents.
Working with the insurer or a claims assessor to determine the compensation amount.

Each state and territory has its own claims process and time limits. Contact the relevant CTP insurer or state authority for guidance specific to your location.

Practical Tips for Managing CTP Insurance

Compare premiums before renewing: In states where you can choose your insurer, compare CTP quotes from different licensed insurers to find the best price for equivalent cover.
Renew on time: Driving without valid CTP insurance is illegal and can result in fines, loss of registration, and personal liability for injuries you cause.
Read the Product Disclosure Statement (PDS): Understand what your specific CTP policy covers, any exclusions, and the claims process before purchasing.
Keep your details current: Notify your insurer or the relevant state authority of address changes or changes to your vehicle to ensure your cover remains valid.
Combine CTP with other car insurance: CTP does not replace comprehensive or third party property insurance. Assess your needs and consider additional cover to protect yourself and your vehicle.

Common Mistakes to Avoid

Assuming CTP covers property damage: CTP only covers personal injuries. You need separate third party property or comprehensive insurance for damage to vehicles or property.
Thinking CTP covers your own injuries: If you cause the accident, CTP does not cover your medical expenses or lost income. Consider personal injury cover or income protection insurance.
Missing renewal deadlines: Letting your registration and CTP insurance lapse means you cannot legally drive your vehicle and you have no cover for injuries you cause.
Not comparing insurers: In states where choice is available, failing to compare can mean paying more than necessary for the same mandatory cover.
Ignoring policy changes: CTP schemes and rules change over time. Review your cover annually and check for updates from your state authority.

Frequently Asked Questions

Is CTP insurance the same as car insurance?
No. CTP insurance only covers personal injuries to other people caused by your vehicle. Car insurance, such as comprehensive or third party property, covers damage to vehicles and property. Most drivers need both.

Can I drive without CTP insurance?
No. Driving without valid CTP insurance is illegal in Australia. You must have current CTP cover to register your vehicle and drive it on public roads.

Does CTP insurance cover me if someone else causes the accident?
If another driver causes the accident and injures you, you claim against their CTP insurance, not your own. Your CTP insurance covers injuries you cause to others.

How much does CTP insurance cost in Australia?
CTP premiums vary significantly by state, territory, insurer, vehicle type, location, and driver profile. As of mid-2026, annual premiums typically range from a few hundred to over one thousand dollars. Check with licensed insurers or your state authority for current prices.

Conclusion: Ensure You Have the Right Cover

CTP insurance is a mandatory component of vehicle registration in Australia that protects other road users from the financial impact of injuries you cause. Understanding what it covers, how to purchase it, and how it differs from other car insurance helps you stay compliant and properly protected. Review your CTP insurance annually, compare premiums where possible, and consider additional car insurance to cover property damage and your own vehicle. For personal advice on your insurance needs, consult a licensed insurance adviser or broker.

General Advice Warning: This article provides general information only and does not take into account your objectives, financial situation, or needs. Before acting on this information, consider whether it is appropriate for you. Read the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) for any insurance product you are considering. Consider obtaining personal advice from a licensed insurance adviser or financial adviser before making insurance decisions. Cover, exclusions, premiums, and availability vary by insurer and by state or territory. Verify current terms and conditions in the PDS or with a licensed adviser before purchasing or relying on any insurance product.