Car insurance: what’s the difference between third party car insurance and comprehensive car insurance?
Your vehicle may well be the second most valuable asset you own. So you want to make sure it and you, are covered. But why do you need two types of car insurance ?
For some people, their vehicle is their pride and joy. For others, simply a way of getting from A to B. Whatever it is for you, you need the peace of mind of car insurance. So, what are your options, and why should you choose them?
Compulsory Third Party (CTP) Insurance
As the name suggests, CTP insurance is compulsory. You cannot register a vehicle in Australia without it. In all states except NSW, QLD and the ACT the state government provides this cover as part of your registration fee. In NSW however, you are required to organise this with an insurer prior to registering your vehicle and in Queensland you nominate which insurer you prefer when you pay for your registration with Queensland Transport.
What is covered?
Compulsory third party (CTP) Insurance. also known as a ‘Green Slip ’ in NSW, insures you or any other driver of your vehicle against liability for death or injuries you may inflict on other road users as a result of a motor vehicle accident for which you or the driver of your vehicle are at fault. Coverage extends to passengers of all vehicles involved in the accident, pedestrians and cyclists.
What is not covered?
CTP Insurance is a type of third party personal injury insurance. It does not, therefore, cover injuries sustained by you or the driver of your vehicle and it does not cover any property damage you may cause through the use of your vehicle. For insurance against damage caused to third party property see Third Party Insurance below.
While your CTP insurance does not cover you for injuries you might sustain in an accident that was your fault, some CTP insurers including Allianz offer additional At Fault Driver Protection Insurance to their CTP customers at no extra charge. At Fault Driver Protection Insurance provides prescribed benefits to you or any other driver of your vehicle for certain severe injuries sustained in an accident that was your fault.
Third Party Insurance
CTP covers injuries caused to other people in an accident, but not damage caused to their property or vehicle. The costs of repairing damage could be substantial - especially if the vehicle or property is quite valuable.
Third Party Insurance provides some additional peace of mind, and comes in two options.
The first is Third Party Property Damage. This insurance provides cover or loss against someone else’s property.
For a little more protection, the second option of Third Party Property, Fire and Theft Insurance adds cover in the event of your vehicle being stolen or catching fire.
Comprehensive Car Insurance
Comprehensive Insurance covers damage to your vehicle, loss of your vehicle or property, theft and damage to other people’s property such as their vehicle.
It also comes with additional benefits such as 14 days car hire if your vehicle is stolen, towing after an accident, a new replacement vehicle, trailer and caravan cover, emergency repairs, and much more.
Better safe than sorry
No-one expects to be in an accident, and it may well happen at the worst possible time, financially.
Your green slip is compulsory, so you’ll need that. Prices vary, so why not give us a call on 13 1000 now and find out just how competitive we can be?
If you really want peace of mind, you should take out Third Party or Comprehensive insurance to cover your vehicle.