In New South Wales and other territories in Australia, it’s mandatory to have compulsory third-party (CTP) insurance for every motor vehicle under your possession.
This insurance, also known as a Greenslip, covers the cost of injuries by you or a third party caused by your vehicle. The coverage applies anywhere in Australia, even outside the state where you obtained the insurance.
For teenage drivers, having this insurance is critical not only because it’s legally mandated, but also because it helps speedily cover medical and repair bills that they may have incurred following the incident.
While anyone can encounter an accident, this protection is especially critical for teen drivers, as their relative inexperience when handling a vehicle may also contribute to riskier outcomes.
With over 16.2% of car crashes resulting in hospitalisation in Australia, CTP insurance can help families overcome potential financial struggles that may arise from medical bills and focus on recovery.
But besides that, there are multiple other benefits of having motor vehicle insurance in Australia for teenagers. Let’s explore these benefits, as well as ways you can prepare your teen for the road with this insurance in tow.
What Does CTP Insurance Cover?
All ten territories of Australia require motor vehicle owners to have CTP insurance for their cars. This insurance policy generally covers personal injury liability for individuals involved in a vehicular accident.
That said, each state has different terms surrounding its CTP insurance policy, so familiarise yourself with your state’s CTP insurance to ensure that you’re getting ample legal coverage.
Typically, CTP insurance covers the following:
- Up to 12 months of medical treatment and expenses (for you, the driver of the vehicle at the time of the accident, and third parties injured from the incident)
- Rehabilitation costs
- Percentage of lost wages
Click here to learn more about CTP insurance.
Property damage resulting from the accident is not covered under a CTP insurance scheme. This is the case regardless of who has caused the crash, whether it’s you or a third party. Fire and theft are also not covered by CTP insurance.
For instance, if you have crashed into someone’s car and have caused damage to it, then you’re responsible for covering the damages from your own pocket. You’re also responsible for covering your car’s damages.
Given this fact, it’s a good idea to get comprehensive car insurance on top of the mandatory CTP insurance for your teens. This way, they’ll feel more assured when they first handle their vehicle, which is a key part of raising resilient kids.
The Benefits of CTP Insurance for Teen Drivers
Teen drivers are met with several benefits when owning and utilising a CTP insurance policy to its fullest extent. Here are some of the benefits of having this type of insurance.
1. Legal Compliance
The primary reason why every driver needs CTP insurance is because it’s a legal requirement. You can’t register and purchase a new car without it being bundled together with a CTP insurance plan.
Furthermore, not owning a CTP Insurance can cause you to incur penalties or fines. As such, if your teenager has their own car, encourage them to get CTP insurance under their name as well.
2. Financial Protection
It’s unlikely that your teen will be able to cover the medical and repair costs resulting from a collision out of their own pocket.
However, with CTP insurance, they can claim a payout that can cover the damages they have incurred from the accident.
For teens who rely on their parents as their source of income, this insurance is pivotal in ensuring that the family’s financial health stays intact despite an accident.
3. Crisis Support
In case your teen is involved in a severe accident, having CTP insurance also grants them access to a Lifetime Care & Support Scheme.
This scheme helps rehabilitate drivers and third-party individuals who have been permanently injured as a result of a vehicular accident. This is granted that your driver is not proven to be at fault.
This scheme helps reduce the long-term financial burden caused by hospitalisation and medical expenses. This can help shoulder the expenses in case of worst-case scenarios wherein your teenager finds themselves hospitalised due to an accident.
4. Peace of Mind
Another benefit of owning CTP insurance is that it provides peace of mind to both the primary driver and their family. Driving without insurance can put people in a situation where they’re just one move away from getting charged thousands of dollars of expenses.
With CTP insurance, both you and your teen can breathe easy knowing that there’s no immense financial pressure waiting to happen when your family does end up in an accident. For many, this assurance is more than worth the monthly cost of CTP insurance.
5. Promotes Responsible Driving
Owning an insurance plan seals your responsibility as a registered driver. It also informs your teen about the dangers and risks of driving.
This label can be enough to lead your teen (and a whole lot more people) to a path of more responsible driving. They’ll be more likely to employ safer driving habits, which can make the driving culture in your local community safer overall.
Additional Insurance Options Besides CTP Coverage
CTP coverage is mandatory and essential for all drivers in Australia. However, there are some incidents that this compulsory insurance doesn’t cover.
As mentioned earlier, natural disasters and damaged vehicles and properties aren’t financially shouldered by this insurance. That’s why many drivers opt to get the optional comprehensive car insurance to cover a broader range of incidents.
Specifically, comprehensive car insurance covers the following:
- Vehicular damage
- Vehicle or property damage of a third party
- Theft or attempted theft
- Fire damage
- Damage caused by natural disasters
- Vandalism
- Damaged windscreen or window wipers
- Emergency transport
That said, when you apply for comprehensive car insurance, you often need to select the specific types of coverage you want included in your policy. The more you choose, the pricier the monthly or annual repayments will be, but the greater the coverage will be as well.
As such, be sure to choose your comprehensive car plan wisely to ensure you get adequate coverage given your circumstances.
Choosing the Right Insurance Provider
Many insurance providers are licensed to give out Greenslips and comprehensive car insurance in NSW and the rest of Australia. A few notable ones include ROLLiN’, Allianz, GIO, NRMA, and QBE.
Given the abundance of options, you should try to do some research to pick the best insurance provider for your case. Here are some tips to help you select the best match for you.
- Choose based on your preferred coverage options: Look for insurance providers that have policies that cover your specific needs. Compare the policy’s value proposition and select the one that has coverage options that meet your needs.
- Review customer ratings: Take a look at the reviews of your chosen insurance provider. If customers have a generally positive reception towards it, then that’s a good sign that you can go ahead and choose that policy.
- Look at payment terms: Compare premiums, deductibles, and the overall cost of the insurance. Ensure that your teen (or you) is able to pay for this amount regularly and on time.
By being selective over your insurance provider, you can further cement your peace of mind knowing that you have a guaranteed fallback following a vehicular accident.
Stay safe!
