When getting a car, it is a prerequisite that every car owner should consider insurance among three different types of car insurance. It may sound demanding but some car insurance is compulsory before registering your vehicle.
The various car insurances will be briefly explained as we read along. It can get a little perplexing for first-time car owners so let us now narrow them down, one by one.
Compulsory Third Party or CTP, Third Party Motor Insurance, and Comprehensive Motor Insurance are the three car insurance options available in New South Wales and indeed other states.
What’s the difference?
Compulsory Third Party Insurance (CTP), and most often called a Green Slip – is an insurance policy – it generally offers benefits to an injured party in a vehicle accident. These benefits are in the form of lost wages, medical expenses and the like.
On the other hand, Third Party Property Damage or Third Party Fire and Theft defrays the costs of repair of the Third Party’s property damage. ie. car, building, etc. This policy offers no protection to your own vehicle if damaged in an accident. As the policy suggests, it protects the Third Party only.
Lastly, Comprehensive Car Insurance covers any damage to the owner’s own vehicle as well as any damage your car causes to other people’s vehicles or property. All vehicles are therefore covered with this level of insurance.
The only policy which is compulsory for New South Wales motorists is your CTP Greenslip. You cannot register your car unless you have a CTP Greenslip in place. The other two policies, Comprehensive and Third Party insurance are optional but please consider these optional insurances carefully as there may be grave circumstances if you are at fault in a car accident without the necessary insurances.