Car insurance must-haves: Do you know the rules where you live?

By Tara McCabe ·
Road sign with warning that says 'caution wildlife in this area', symbolising car insurance rules in different states.

Once you have your driver’s license, making the decision to buy your very own car can be pretty exciting. Then, when you’ve settled on the wheels to take your dream road trip, the next step is to get your car registered and insured.

How insurance differs in each state and territory

As you might have read, a minimum level of car insurance is required by law in all states and territories. This is usually Compulsory Third Party Insurance (CTP), but can differ depending on where you live.

Australian Capital Territory

As of this year, if you’re looking to register a car in the ACT, you will have to take out Motor Accident Injuries (MAI) Insurance. MAI insurance is mandatory. It is the minimum level of insurance you must have and it must be paid at registration.

Unlike CTP insurance, however, which only covers those injured by an at-fault driver, MAI insurance is designed to cover everyone. That means everyone who is injured should be entitled to receive treatment, care and lost income benefits for up to five years.

Insurers licensed to offer MAI insurance in the ACT are:

New South Wales

Also known as a green slip in New South Wales, NSW’s CTP insurance is mandatory and you must have it before you register your vehicle.

It is made up of two different components, the Third Party Insurance Scheme and the Lifetime Care and Support Scheme. Together, the two offer compensation for people injured or killed in an accident and ongoing care for serious injuries. 

NSW has seven licensed CTP insurers. These include:

Northern Territory

In the Northern Territory, CTP insurance is more commonly known as the Motor Accidents Compensation (MAC) scheme. All NT motorists are required to have CTP insurance by law and the cost of it will be automatically included in your vehicle registration fee.

Unlike other parts of Australia, the NT’s MAC scheme provides ‘no fault’ motor accident insurance. In other words, as long as the car was not being driven unlawfully, anyone should be able to file an accident-related claim, regardless of who is at fault.

The Territory Insurance Office administers CTP insurance on behalf of the NT government. The insurance provides personal injury cover for passengers in your car, other drivers or motorcyclists and their passengers and, pedestrians and cyclists. 

Queensland

Again CTP insurance is mandatory in Queensland and you must have it to you register your car. It is regulated by the Motor Accident Insurance Commission (MAIC) and is funded by a levy added to each vehicle registration.

CTP insurance in Queensland covers injury claims caused by a motor vehicle. However, if the injured person is the driver at fault or negligence cannot be proven, then they will not be able to make a claim under CTP insurance.

The MAIC website says that in the event that you cannot claim compensation, unless you have income protection or private health insurance, you will have to rely on sick leave, Centrelink and Medicare.

The following insurers offer CTP insurance in Queensland:

South Australia

As of July 2019, CTP insurance in South Australia is regulated by the CTP Regulator. It is compulsory and you will pay for it when you pay for your car registration.

CTP insurance in South Australia provides cover for at fault accidents. However, you will only be eligible for compensation if you were not at fault or not entirely at fault. If you were the driver entirely at fault, then you will not be able to make a claim, unless you sustain lifelong injuries.

Insurers that offer CTP cover in SA are: 

  • AAMI 
  • Allianz
  • QBE
  • SGIC

Tasmania

In Tasmania, CTP insurance is overseen by the Motor Accidents Insurance Board (MAIB). It is mandatory to have and you will pay it as part of your annual vehicle registration

CTP insurance in Tasmania provides cover for ‘no fault’ accidents. This means that compensation can be claimed, regardless of who is responsible. Compensation for those eligible includes cover for reasonable medical, ambulance and hospital costs, rehabilitation expenses, loss of income, long term care for serious injuries and disability allowance.

Victoria

In Victoria CTP insurance is administered by the Transport Accident Commission (TAC). The TAC is the only insurer that handles CTP insurance in the state and it is compulsory.

When you first register your car, TAC will determine what TAC premium you will be charged, based on stuff like what type of vehicle you have, what your intended use is and so forth. After that, the charge will appear on your VicRoads registration renewal as either a ‘TAC Premium’ or a ‘TAC Charge.’

The TAC will not consider fault when determining eligibility for compensation. The scheme provides compensation for medical treatment, rehabilitation, disability services, income, travel and general household support.

Western Australia

In Western Australia, motor vehicle registration is known as a motor vehicle licence and CTP insurance is included in the cost of it. The Insurance Commission of Western Australia (ICWA) is the only CTP insurer in the state and it is compulsory.

WA’s CTP insurance is a type of ‘at fault’ insurance, meaning that if another driver was at fault, it should provide compensation for you, any passengers in the car with you and anyone else injured as a result (e.g. pedestrians). If the accident was your fault, you will not be covered unless your injuries are catastrophic.

Compensation can include reasonable hospital costs, medical treatment, rehabilitation and long term care.

What does CTP insurance not cover?

No matter what shape or form it comes in, it should be noted that compulsory third party insurance will not cover your car repair costs. This type of insurance only provides cover for injuries to yourself, passengers and other drivers. 

If you want to make sure you don’t wind up with a big repair bill, you will have to take out either third party insurance or comprehensive insurance.

Head to Mozo’s car insurance guides hub for more information.

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Tara McCabe
Tara McCabe
Money writer

Tara McCabe writes across all areas of personal finance here at Mozo from banking through to insurance. Tara is expert at practical money tips, showing readers ways to live richer and be socially conscious while doing it. She earned a BA (Hons) in English Literature from Canterbury Christ Church University.