Understanding Compulsory Third Party Insurance

Compulsory Third Party (CTP) Insurance is sometimes referred to by other names. In NSW it’s usually called a Green Slip. In the ACT the equivalent scheme is called Motor Accident Injuries (MAI) Insurance. However, the purpose of this type of insurance is the same everywhere – even if not everyone understands it in detail.

A study by the Queensland Motor Accident Insurance Commission (MAIC) in 2020 found that nearly half of the people surveyed thought CTP would pay for damage to someone else's car.¹ And more than a third of the people thought CTP would pay for damage to someone else's property, like their house.¹

It’s time to get the facts straight and debunk some common CTP insurance myths.

Myth #1: CTP covers both injury to others and damage to vehicles

If you are involved in a motor vehicle accident, CTP Insurance will only cover your liability for injuries caused to a third party. In some states, CTP may also cover the at-fault driver for costs related to their injuries.

CTP Insurance is designed to help drivers, cyclists and pedestrians injured in a car accident get access to medical treatment and cover for things like loss of income (subject to exclusions). It also ensures you’re not left out of pocket for an injury claim made against you.

CTP does not cover damage to vehicles or property. AAMI Comprehensive Car Insurance on the other hand provides cover for accidental loss or damage to your car and damage to someone else’s car or property caused by the use of your car.

Get an AAMI Comprehensive Car Insurance quote

Myth #2: The level of cover is the same Australia-wide

What’s covered varies from state to state. Things like fault, liability, injury and compensation are really dependent on where the accident occurs – regardless of where your car is registered.

For example, at-fault drivers in NSW may be eligible for compensation caused by serious injuries, while this may not be the case in Victoria.

It’s a good idea to familiarise yourself with your local CTP or MAI Insurance regulations. Your state or territory government’s website can be a good place to start.

Myth #3: A Green Slip and a pink slip are the same thing

With both Green Slips and pink slips in NSW, it can be confusing to keep them straight. An eSafety inspection report, also known as a ‘pink slip’, is required as part of the yearly registration for most light vehicles more than five years old.

On the other hand, a Green Slip is just another name for the CTP insurance all car owners have to get every year in NSW.

Remember, just because you have your pink slip doesn’t mean you have your Green Slip! Make sure you do your colour slip checklist every year when you renew your registration. If you’re required to get a pink slip so you can get your Green Slip, it will say so on your registration renewal notice.

If you’d like to learn more about the difference between NSW Green slips and pink slips, read our in-depth guide.

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Getting the right cover for you

Remember, CTP is not the same as car insurance, which you need to buy separately. If your car is damaged in an accident and you need to claim, a comprehensive car insurance policy like AAMI’s Comprehensive Car Insurance can help fill the gaps in cover that you won’t get with CTP insurance.

This may include accidental loss or damage to your car during the period of insurance, such as from hail, storm (including cyclone), fire, theft and collision. We also provide cover for your legal liability for damage to other people’s car or property arising from the use of your car.

Whether it’s a prang or a major accident, having car insurance on top of your CTP can save you from being potentially thousands of dollars out of pocket.

Need more information on our car insurance options? AAMI’s got your back.

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Read more:

• Understanding amount covered and market value
• What to do in a minor car accident
• What happens when you’re in a car accident and not at fault?

¹ MAIC

Insurance is issued by AAI Limited ABN 48 005 297 807 AFSL 230859 (AAI) trading as AAMI. Please read the relevant Product Disclosure Statement before buying this insurance. Target Market Determination is also available. This advice has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it.