Weighing up CTP as RACQ drops it from its car insurance

Last week, popular insurance provider RACQ said it plans to withdraw its Compulsory Third Party (CTP) insurance scheme from its car insurance offerings. 

RACQ will cease offering CTP cover to drivers from 30 September 2023, and from October, Queensland motorists will no longer be able to nominate RACQ as their CTP insurance provider. The drivers with an existing insurance policy with RACQ will be in place for the next 12 months and will be transitioned to another insurance provider on their renewals. 

But why has RACQ stopped offering CTP? 

In the last five years, the gap between the most and the least profitable insurance provider has increased quite a bit, says RACQ, and CTP is no longer an economically viable area for the company to be in. 

Furthermore, RACQ chief executive David Carter said that in recent years RACQ’s risk profile has worsened through no fault of its own, resulting in significant losses for the business. 

“In FY22, for every $100 of premium RACQ received, we paid $123 in claims and expenses due to the increased frequency and severity of claims that the Club received relative to the scheme average,” said Carter. 

“We saw little change in FY23 and in the absence of any changes to the way premium is shared between insurers, the outlook shows no signs of material improvement,” he added. 

How important is CTP to drivers? 

Compulsory Third Party insurance is the most basic type of car insurance, and as the name suggests, every driver in Australia is legally required to have it. In short, it offers cover for people who may be injured or killed in a motor vehicle accident involving your vehicle. This may include the driver of your vehicle, other drivers, passengers, pedestrians, cyclists, and motorcyclists. 

However, CTP doesn’t cover the cost of damage to vehicles and property, nor does it cover damage to – or loss of – your own vehicle.

If you’re after extra coverage, you might want to go a bit further and get insurance for your car as well. For example, comprehensive car insurance gives you third party cover as well as cover for your own car for different kinds of insurable events. It can even cover damage to your vehicle that might result from fires, storms, or hail, and replacement costs if your vehicle gets stolen. 

But of course, you should always choose the cover that suits you the best, and it’s important to read the terms and conditions in the product disclosure statement before and factor in state-based differences. Sometimes the policies offered in a state such as Queensland can differ to say, New South Wales. 

Be sure to always compare car insurance policies to find the cover that suits you best. Start your research below with some of the top car insurance products on the market. 

Compare car insurance

Mozo may receive payment if you click products on our site. Mozo does not compare the entire market.
Last updated 11 December 2024Important disclosures
Important information on terms, conditions and sub-limits.
  • Comprehensive Car Insurance

    Monthly premiums
    Calendar icon
    Yes Costs Extra
    Choice of repairer
    tools icon
    Optional Extra
    Choice of excess
    coins icon
    $400 - $2,500
    Agreed or market value
    Car coin icon
    Agreed Or Market

    Available discounts

    • Comprehensive Car Insurance

      Monthly premiums
      Calendar icon
      Yes Costs Extra
      Choice of repairer
      tools icon
      Optional Extra
      Choice of excess
      coins icon
      $500 - $2,300
      Agreed or market value
      Car coin icon
      Agreed Or Market

      Available discounts

      • Online Discount $75
      Details
    • Gold Comprehensive Car Insurance

      Monthly premiums
      Calendar icon
      Yes Costs Extra
      Choice of repairer
      tools icon
      Optional Extra
      Choice of excess
      coins icon
      $550 - $1,900 (varies By State)
      Agreed or market value
      Car coin icon
      Agreed Or Market

      Available discounts

      • No Claim Discount
      • Online Discount 15%
      Details
    • Comprehensive Car Insurance

      Monthly premiums
      Calendar icon
      Yes
      Choice of repairer
      tools icon
      No
      Choice of excess
      coins icon
      $800 Flat Excess Fee
      Agreed or market value
      Car coin icon
      Agreed

      Available discounts

      • Get 10% Off The Base Premium For The First 2 Consecutive Monthly Policies And Up To A 15% Potential Monthly Discount From Your 3rd Month For Being A Safer Driver. Minimum Premiums May Apply. T&Cs Apply.
      Details

    * Terms, conditions, exclusions, limits and sub-limits may apply to any of the insurance products shown on the Mozo website. These terms, conditions, exclusions, limits and sub-limits could affect the level of benefits and cover available under any of the insurance products shown on the Mozo website. Please refer to the relevant Product Disclosure Statement and the Target Market Determination on the provider's website for further information before making any decisions about an insurance product.

    ^See information about the Mozo Experts Choice Car Insurance Awards