Compulsory Third Party insurance (CTP insurance) is a type of car insurance used in Australia that is a mandatory requirement for all NSW vehicles with the exception of trailers. CTP insurance is colloquially referred to as a green slip to reflect the colour of the paper on which the form is printed.
Green slips are essentially an insurance policy that is linked to your motor vehicle to cover road crash injuries and deaths. If you or the driver of your vehicle is involved in a motor vehicle accident and at fault for causing injury or death to another person, CTP insurance will provide compensation and protection from a damages claim. Your green slip offers Australia wide coverage, 24 hours a day and provides cover for:
- your passengers.
- other road users (e.g. drivers, pedestrians, cyclists and motor cyclists).
- anyone injured by a trailer you may have been towing at the time.
However, it does not cover damage to property or other vehicles.
Compensation provided by green slips for injured parties include cost of medical treatment, rehabilitation expenses and even lost earnings as a result of the accident. Since 2010, at fault drivers are also able to claim up to AUD $5,000 in reimbursement for reasonable medical costs and lost earnings from their CTP insurance provider. Furthermore, the Lifetime Care and Support Scheme allows for special benefits that cover any child under 16 years of age injured in an accident regardless of whether you are at fault or not.
As mentioned previously, CTP insurance is a legal obligation and must be taken out when you register your motor vehicle. Green slips also have an expiry date so you must ensure that the green slip period is aligned with your registration period when you renew it.
Since your vehicle cannot be renewed without a green slip, it is important to understand the different factors that should be considered in getting one. The Motor Accidents Authority (MAA) is a statutory corporation that acts as the regulatory body for the Green Slips scheme. Currently, there are seven licensed insurance companies that offer green slips. The insurance companies set their own insurer premiums on the CTP insurance they offer but these green slip premiums are checked by the MAA for compliance with legislation ad guidelines.
There is a considerable amount of variation in green slip insurance prices because each insurer determines their green slip premiums using different factors. When setting their insurance premiums, CTP insurers go through two main processes: setting the price range each type of vehicle belongs to and applying different weightings to individual risk factors such as driver age, type of vehicle and driving history.
Moreover, GST and the Medical Care and Injury Services (MCIS) levy are applied to the insurer’s premium. The MCIS levy contains a MAA component and a Lifetime Care and Support component. The former is calculated as a fixed percentage of the insurer’s premium and covers things such as ambulance and hospital services irrespective of fault. On the other hand, the Lifetime Care and Support levy has different rates according to risk and vehicle class. It serves to cover costs associated with providing lifetime care to those severely injured regardless of fault.
The MAA offers a useful online green slip calculator that will provide an estimate of green slip insurance prices for your vehicle. You can use this as a starting point to gain an idea of how much you will need to pay. To get the best price for your green slip insurance, it is advisable to get green slip quotes from more than one insurer. This will enable you to compare the different offerings and select the one that best caters for your needs.
