CTP Insurance v Third Party Property Damage coverage

Insurance should always be about protection not price.

I received the following question from a Queensland-based person who I would suggest does not work in general insurance, but I am glad to assist her to understand the basics.

Hi there,

Im in the process of obtaining CTP insurance for an old car.  I am finding that all Queensland CTP insurers charge the same amount and don’t think there is any point of difference between the top 7 insurers.

If you are aware of there being a better insurer as they offer extra at fault cover or some other benefit than a standard insurance policy I would appreciate the feedback.  I am also not understanding why my fully comprehensive insurance is $340 per annum and CTP is approx $318 does my fully comp insurance not cover an at fault claim.  I’m feeling as though I’m paying the piper twice for the same cover ?  I will be making up my own mind however your thoughts would be appreciated….


Susan …” [Surname and email provided]

Thanks for your note, Susan.

CTP insurance stands for Compulsory Third Party and covers you for any injury that you may be held legally liable as a result of your ownership or use of your motor vehicle.

It is what is known as a Statutory Class, which means that you are required to have the cover by law. It is an offence if you do not have this insurance and drive your motor vehicle on a public road, and, depending on the jurisdiction, in an area open to the public. In addition, if you were to injure someone without the insurance, you would ultimately be required to meet the claim out of your own pocket.

This form of insurance does not protect you against claims for damage to other people’s property. It only covers death, injury etc. to others where you are found legally liable.

Being a Statutory cover, it is the same cover with all insurers.

Turning now to your motor insurance. You mentioned you have Comprehensive cover. This provides protection against your car and third party property damage.

The third party cover under such a Motor Vehicle Policy (not your CTP Insurance) protects you for any claim against you for damage to another car or other property (say you run into a fence, shop front, a bridge, tunnel or some other property). In such a case, if you were found legally liable, the insurer would protect/indemnify you up to the amount of cover afforded by the policy; typically these days $20 million, $25 million or $30 million, but you do need to check this on the Policy Schedule and or Policy wording to be sure of the amount afforded by your particular policy.

Motor policies, as opposed to CTP insurance, do vary with the quality of coverage afforded, so you do need to take into consideration much more than the price alone. Also, look on the web for claims stories to ensure that the insurer you select has a good claims service. Some are wonderful at taking your money, but very difficult to get money out of. The Financial Obmudsman Service also provides a great service giving an indication of claims service. For motor, see http://www.fos.org.au/comparativetables/2010-2011/.

There are over 122 private motor insurance policies up on the LMI PolicyComparison.com website. To use a car analogy, these can range from Rolls Royce to a cheap bomb. Not so much on the coverage although there are many differences. It is the claims service that I worry most about with some insurers.

Also, be very careful with some of the insurance comparison sites as they often have the same insurer carrier just badged under different brands or policies.

A total of $658 may sound like a lot of money, but it is a drop in the ocean should you ever be unlucky enough to have an accident. Then you will see that the extent of the coverage, the financial strength of your insurer and their claims service are what really matters.

I am not able to give you detailed advice on the insurance you need without a needs analysis etc. I am not sure if you have an insurance broker, but if you have any doubts these are the experts to speak with.

I hope that what I have been able to provide help.


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