what is ctp insurance

​*CTP laws vary between states and territories. The information in this article is in regard to Queensland law only.


CTP is a form of personal injury insurance that is compulsory for every registered vehicle in Australia – that means motorbikes, commercial vehicles, cars, and any other registered vehicle.

CTP is an abbreviation for ‘compulsory third-party’ insurance.


It provides compensation for people injured or killed in a car accident that is deemed to be not their fault.

That means the CTP insurance you select when you register your car would pay for another party’s personal injuries if you caused an accident. And, vice versa, their CTP insurance would cover you if they were the party that caused the accident.  

Unlike the majority of insurance schemes, CTP provides unlimited cover. There are no capped benefits. The amount of compensation distributed and the amount of claimants is calculated throughout the claims process.


What does CTP cover?

As stated above, CTP is a type of personal injury insurance. That means it does not cover damages to property such as your car, trailer, bulbar, etc.

It can cover the personal injuries (mental or physical) of:

  • Drivers
  • Passengers
  • Motorcyclists
  • Pedestrians
  • Cyclists

who were involved in an accident. 

Essentially, it could cover anyone effected by an accident that was not their fault that caused them significant mental or physical injury. 

This could be a pedestrian witnessing an accident that results in PTSD and a heavy impact on their ability to continue life normally.

This can also include dependent relatives of those involved in a not-at-fault crash. It doesn't matter whether they were present at the scene of the accident or not, they are likely to be heavily impacted by their relative's inability to continue life normally.

Other common scenarios that are and aren't covered include:

You cause an accident that injures or kills someone else

Your CTP insurer will pay the compensation owed to the affected party and you will have to seek your own compensation through alternative routes - perhaps your own comprehensive insurer, employer, superannuation, etc.


You cause an accident that injures or kills you

You are unable to claim CTP insurance in QLD.


Someone else causes an accident that injures or kills you

You and/or your dependents can claim against the at-fault driver's CTP insurance scheme. 

Someone else causes an accident that injures or kills you, but you were partly at fault

You and/or your dependents may still be eligible to claim against the more at-fault driver's CTP insurance scheme. However, your compensation will be lowered to factor in your own liability. 

You were in a multi-car crash that was not your fault

The most at fault driver?

An uninsured or unidentified person causes an accident that injures or kills you

In QLD, you can still apply for compensation. It will simply be against something called the 'nominal defendant' as opposed to the at-fault driver's CTP scheme.


Nominal defendant claims are slightly different to normal CTP claims and should be handled carefully. If you want to know more about nominal defendant claims, you can check out our article here


Should a person be eligible to claim against a CTP insurer, they could be covered for things like:

  • Ambulance and hospital costs
  • Medical treatment
  • Rehabilitation
  • Loss of income
  • Long-term after-care

And more.

You can visit our article here if you would like a more comprehensive overview or what you could claim under a CTP scheme.


Why is CTP compulsory?

CTP insurance is compulsory for good reason – it ensures those affected by non-at-fault accidents have access to adequate funding.

On the other hand, it protects at-fault drivers from having to pay out of their own pocket for compensation. Personal injury payouts can be anywhere from a few thousand dollars to a few million dollars, so it is in everyone's best interest to maintain a compulsory third party system. 


How is CTP different to comprehensive insurance?

Most drivers will choose to have comprehensive insurance in addition to their CTP insurance.

Why?

Because - CTP insurance does not cover theft, vandalism, fire, or any property damage caused to your car or another party’s car, whether it was your fault or not.

That means if you are in a not-at-fault accident and your car is written off and you are severely injured, the other driver’s CTP insurance will cover your injuries but not your car damage.

In addition to car damage, some comprehensive policies can provide:

  • Towing
  • Roadside assistance
  • Windscreen protection
  • Hire care reimbursement
  • Replacement car if your new car is a total loss

The benefits will vary depending on the provider and cover you choose.

And just like you can choose your comprehensive cover, you can also choose your CTP provider.

In QLD, you do this at the time of registering your car. MAIC is the QLD insurance commission that provides a free comparison tool on their site so you can pick the CTP insurer that's right for you.


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