How car insurance works in Australia has two layers. First, Compulsory Third Party insurance, known as CTP or Green Slip, is mandatory for registration and covers your liability if you injure or kill another person in an accident. CTP is included in your rego fee in VIC, QLD, WA, SA, TAS and NT, and purchased separately in NSW and ACT. CTP does not cover car damage. Second, optional insurance covers property damage. You can choose Third Party Property Damage which covers damage you cause to other people's cars and property up to $20M, Third Party Fire and Theft which adds cover if your car is stolen or burnt, or Comprehensive which covers your car as well for at-fault accidents, theft, fire, storm, vandalism and also covers others. When you buy comprehensive, you choose agreed value, which is a set value like $35,000, or market value, which is what your car is worth at claim time. You choose an excess, typically $600 to $1,200, which is what you pay in a claim. Your premium is based on your age, driving record, no-claim bonus rating from 1 to 6, postcode, car make and model, parking, kilometres and excess. If you have an accident, you lodge a claim online, pay excess, and insurer arranges repair or cash settlement. If you are not at fault and can identify the other driver, many insurers waive excess and provide hire car. No-claim bonus gives up to 60% to 70% discount for claim-free years. Insurance is regulated by ASIC and APRA.
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