Your CTP 'Green Slip' Does NOT Cover Car Crashes! The Danger of Driving with Only Rego in Australia

The Danger of Driving with Only Rego in Australia

You bought a used car, went to Service NSW, VicRoads, or your local Transport Dept, paid your Registration ("Rego"), and paid for your Compulsory Third Party (CTP) insurance. You think you are fully covered, right?

WRONG.

This is the most dangerous misconception for new drivers in Australia. Driving with only CTP is like playing Russian Roulette with your financial future. Here is why.

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1. CTP (Green Slip) Covers People, Not Metal

In Australia, CTP (Compulsory Third Party) is mandatory by law. In NSW, it's a separate "Green Slip"; in states like VIC, QLD, and WA, it's bundled into your Rego fee.

• What it covers: If you cause an accident, it pays for the medical bills and rehabilitation of the people injured (pedestrians, passengers, other drivers).
• What it does NOT cover: It does NOT pay for the damage to your car. Crucially, it does NOT pay for the damage to the other car you hit.

The Nightmare Scenario: You have only CTP. You slide on a wet road and hit a brand new Tesla. The driver is fine (CTP covers nothing). The Tesla has $30,000 in damage. You must pay that $30,000 out of your own pocket.

2. The Minimum Safety Net: Third Party Property Damage

If you are driving a cheap "bomb" car (worth $2,000) and don't care if it gets wrecked, you might think you don't need insurance.

But you absolutely need "Third Party Property Damage" insurance. It is relatively cheap (often starting from $400 a year).

It won't fix your cheap car if you are at fault, but it will pay for the expensive car you hit. It prevents you from going bankrupt over a minor fender bender.

Bonus Perk: Most Third Party policies also include an "Uninsured Motorist Extension." If an uninsured driver hits you and it's not your fault, the insurer will repair your car up to a limit (usually $5,000).

3. The Gold Standard: Comprehensive Insurance

This covers everything:

• Damage to other cars and property.
• Damage to your own car (even if the accident was your fault).
• Theft, fire, vandalism, and storm damage (hailstones!).

If your car is worth more than $5,000 or you have a loan on it, Comprehensive is highly recommended.

4. How to Lower Your Premium

Insurance in Australia can be pricey, especially for young drivers (under 25). Here are 3 tricks to save money:

💰 1. Increase Your Excess

The "Excess" is what you pay when you make a claim. Standard is often $600-$800. If you raise it to $1,200 or $1,500, your annual premium will drop significantly. Just make sure you have that cash saved in case of an accident.

🚗 2. Market Value vs. Agreed Value

Choose "Market Value" for your car instead of "Agreed Value." It means the insurer decides what your car is worth at the time of the crash based on sales data. It is slightly riskier but cheaper month-to-month.

🔞 3. Restrict Drivers

Tell the insurer that "No drivers under 25" will drive the car. This age restriction offers a massive discount because young drivers are statistically higher risk.

Don't Risk Bankruptcy

Don't be the person crying on the side of the road because you "thought" Rego covered everything. It doesn't.

At the very least, buy Third Party Property insurance today. It costs less than a coffee a day to protect yourself from a lifetime of debt.

(Disclaimer: This article is for informational purposes only. Insurance terms vary by provider and state. CTP schemes differ between NSW, VIC, QLD, and other territories. Always read the Product Disclosure Statement (PDS) before buying insurance.)