Explanation of Third Party Car Insurance – Forbes Advisor Australia

No driver wants to think of a disaster on the road, but everyone must be prepared for it. Third party auto insurance ensures that you have financial protection to cover costs related to injuries or damage to vehicles and property that you may cause while driving.

It generally does not cover both mandatory and optional levels of third party insurance if your vehicle is scraped or rendered useless in an accident. Therefore, be sure to evaluate the value of your trip and how it will be used before choosing exclusively third-party insurance.

If your budget-friendly casters don’t guarantee a higher annual premium for a comprehensive policy with a wider cover, a third party may just suit you. To help you decide, here’s everything you need to know about third-party auto insurance.

Different types of third party car insurance

There are three levels of third party car insurance in Australia that cover you for different circumstances while driving: Compulsory Third Party (CTP), Third Party Property Damage and Third Party Fire and Theft. Let’s explore all:

Compulsory Third Party Car Insurance (CTP)

It is mandatory to have a Cash Transfer Program (CTP) in Australia. Although its name varies between states — it’s sometimes called “green coupon” or “automobile injury insurance” — and the exact details of the policy vary, in general, it covers your liability, and anyone who drives your car, for injuries to others in Car accident. It also generally covers any personal injury claims arising from the accident.

See details for your state or territory here:

  • New South WalesThe cash transfer program in NSW is overseen by the State Insurance Regulatory Authority, where it is also referred to as the ‘Green Coupon’. Drivers purchase coverage through private insurance companies, which means prices can vary. The amount and schedule of compensation varies depending on the severity of the injury, but it can last a lifetime if necessary, regardless of the fault.
  • VictoriaTransport accident fee is included in Victorian registration costs, with Transport Accident Commission (TAC) insurance for drivers. TAC is not wrong, and providers cover things like medical care, rehabilitation, counseling, home modification and income support.
  • Australian Capital TerritoryMotor Accident Injury Insurance (MAI) is administered by private insurance companies and supervised by the state government. Payable at registration, include treatment, care, and lost income benefits for up to five years regardless of who was at fault (including you, other drivers, cyclists, and pedestrians).
  • QueenslandCTP insurance in Queensland is regulated by the Motor Accident Insurance Commission (MAIC) which is managed by private companies. It covers medical treatment, rehabilitation and “fair compensation”. However, if the affected person is liable or no one is at fault, the MAIC says you will need to rely on sick leave, Centrelink benefits, Medicare, and the private or public health system.
  • Tasmania: CPT is regulated through the government agency, Motor Accident Insurance Board (MAIB), and is paid along with vehicle registration. It provides medical benefits, disability benefits and income on a no-fault basis.
  • Western part of Australia: Motor vehicle injury insurance is regulated by the Insurance Commission of Western Australia and must be paid at registration. It has two components: Mandatory Third Party (CTP) and Catastrophic Injury Support (CIS). The former covers other drivers for costs related to injuries and death, while the latter part covers more serious or debilitating injuries that require lifelong care. You can still claim if you are the driver at fault, but there are some limitations about this.
  • South Australia: You can nominate a CTP insurance provider at the time of Rego to cover injuries or death they cause. You will only be able to claim compensation if you were not at fault in the accident or if you are only partially responsible.
  • Northern Territory: The Cash Transfer Program (CTP) is included in your vehicle’s re-registration fee, which covers medical and rehabilitation costs as well as financial support. It is administered through the NT Auto Accident Compensation Commission and is a no-fault scheme (meaning anyone can get benefits regardless of fault) and covers pedestrians, cyclists, drivers, commuters and motorcyclists.

Car insurance against property damage

This is the basic level of third party insurance that drivers can choose if they want to cover damages you may cause to other people. cars or property while driving. For a single accident, most major insurers set a payment limit of $20 million.

Some policies may include a lower amount (usually around $5,000) to cover your own car if the accident was caused by an uninsured driver and you can prove that he was completely at fault. But in general, basic third-party insurance does not cover your car.

Third party fire and theft

As the name suggests, this level of insurance adds coverage for damage to your car as a result of fire or theft. Most insurance providers put a limit of around $10,000 on payments in these circumstances, but generally you’ll choose the exact amount that matches the value of your car. A higher level of coverage will increase your premium.

Some providers include additional types of coverage within this broader umbrella. This may include covering the costs of towing a fire or vehicle damaged by thieves to a repairer, renting a vehicle while it is being repaired or replaced (usually up to 21 days), and covering some valuables stolen or damaged inside your vehicle (usually up to $500) .

What is not covered by third party insurance?

Even when you have a CTP cover and a basic third party policy, your vehicle will generally not be covered for any damages, including wear, electrical or mechanical failure, and any damages caused during illegal activities (such as driving under the influence) – unless you choose coverage Against fire, theft and a claim fit these criteria. If you want peace of mind, Consider comprehensive car insurance.

Third party auto insurance vs comprehensive insurance

In short, comprehensive car insurance includes everything in the third-party policy, and adds coverage to your wheels at the top for a higher premium. What’s included depends on your service provider, policy, and any optional extras you agree to add (for an additional fee). This can extend from total replacement cover if your vehicle is broken, to towing, travel and accommodation costs after an accident.

Like third-party cover, blanket policies still don’t cover costs related to general wear and tear, and there are likely to be other exceptions: Be sure to check your Product Disclosure Statement (PDS) for details.

How to submit a car insurance claim to a third party

Be sure to write down as much detail as possible at the time of the accident – this provides evidence to support your insurance claim. After ensuring the safety of all concerned and reporting the incident to the police, be sure to collect:

  • Name, contact details, vehicle registration plates and insurance information for all road users involved.
  • The date and time of the accident.
  • Road conditions and the sequence of events that led to the accident.
  • Any photographs of damage to vehicles.
  • Contact information for any witnesses

For a CTP claim, seek medical treatment as soon as possible (keep any documents), then go to the relevant CTP provider or government agency to file a claim. If you are making a third party ownership claim, contact your service provider at the time of the accident to check if there are any steps you need to take (such as towing damaged vehicles to a specific repairer). Then, file your claim with accompanying evidence as soon as possible.

Frequently asked questions (FAQs)

How much does third party car insurance cost?

CTP premiums depend on your location (state and zip code) and the size of your vehicle. There is a flat rate in states and territories where cash transfer programs are regulated through government agencies, while premiums vary somewhat when private insurance companies administer their policies (although competition is still governed by government).

Other third-party policies may consider additional factors when determining premiums, such as your age, gender, driving history, insurance history, and make and model of your vehicle. You may be able to access discounts to stay loyal to the same insurance provider or not make any claims on your policy, so be sure to investigate what you are entitled to.

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