After a car accident, one of the most common sources of confusion is insurance. You have a green slip, you might have car insurance too, and you are not entirely sure which one covers what. Does your CTP look after your smashed car? Does your car insurance help with your injuries? The answer to both is usually no, and understanding why saves a great deal of frustration at an already stressful time.
The short version is that these are two completely different types of insurance doing two completely different jobs. One covers people. The other covers property. Knowing which is which tells you where to turn for your injuries and where to turn for your car, because after a serious accident you may well need both.
This guide explains what CTP insurance covers, what car property damage insurance covers, how they differ, and what happens when you are both injured and left with a damaged car. Please treat it as general information rather than advice about your own situation, and you should seek advice about your particular circumstances before making decisions.
Two different insurances for one accident
Every registered vehicle in New South Wales carries compulsory third party, or CTP, insurance, the green slip. Many drivers also choose to take out car insurance on top of that. People often assume these overlap, or that one is simply a more complete version of the other. They are not. They cover entirely different kinds of loss, they are governed by different laws, and disputes about them go to different places.
The simplest way to hold it in your mind is this. CTP is about injury to people. Property damage insurance is about damage to things, chiefly vehicles. When an accident causes both, which serious accidents often do, you are dealing with two separate claims running under two separate systems.
What is CTP insurance, and what does it cover?
CTP insurance is compulsory. You cannot register a vehicle in NSW without it, and its purpose is to provide compensation to people who are injured in motor accidents. It operates under the Motor Accident Injuries Act 2017 (NSW), the scheme regulated by the State Insurance Regulatory Authority, known as SIRA.
What CTP covers is personal injury. If a motor accident injures someone, whether a driver, a passenger, a pedestrian, a cyclist or a motorcyclist, the CTP scheme is where they claim for that injury. It provides income support and treatment, and for more serious injuries it can provide lump sum damages.
Just as importantly, here is what CTP does not cover. It does not pay for damage to your car, or to anyone else’s car, or to any other property. It does not cover towing, storage or a hire car. CTP is concerned with injured people, full stop. This is the single biggest misunderstanding people have after an accident, arriving expecting their green slip to fix their car, and it is why so many are caught out.
You can read more about the injury side in our guides on who can claim CTP in NSW and how to make a CTP claim in NSW.
What does car property damage insurance cover?
Car property damage insurance is the optional cover that deals with the vehicles and property that CTP leaves out. Unlike CTP it is not compulsory, though a lender may require it if your car is financed. It comes in a few forms, and which one you hold makes a real difference.
Comprehensive insurance is the broadest. It generally covers damage to your own vehicle as well as damage you cause to other people’s vehicles and property, and it usually extends to theft, fire and weather damage.
Third party property damage insurance is narrower. It generally covers damage you cause to other people’s vehicles and property, but not damage to your own car. It is the more affordable option, and it leaves you to bear your own repair costs if the accident was your fault.
Third party fire and theft sits in between, adding cover for fire damage and theft of your own vehicle to the basic third party property protection.
These policies are ordinary general insurance, governed by the General Insurance Code of Practice, and disputes about them are dealt with by the Australian Financial Complaints Authority rather than the CTP system.
The key differences at a glance
The table below sets the two side by side.
| CTP (green slip) insurance | Car property damage insurance | |
|---|---|---|
| Is it compulsory? | Yes, required to register a vehicle | No, it is optional |
| What it covers | Personal injury from a motor accident | Damage to vehicles and property |
| Whose losses it covers | People injured, including drivers, passengers, pedestrians, cyclists and riders | Your car, and depending on the policy, other people’s property |
What happens when you are injured and your car is damaged?
In a serious accident, both kinds of loss often happen at once. You are hurt, and your car is wrecked. Because CTP and property insurance are separate, this means you may have two distinct claims to pursue, each under its own rules.
For your injuries, you claim through the CTP scheme, against the green slip insurer of the vehicle at fault, or your own where relevant. For your car, you turn to your property insurance, or, if you were not at fault, you may be able to recover your repair or replacement costs directly from the at fault driver. If you hold comprehensive insurance, your insurer will usually handle the car and then pursue the other driver to recover what it paid, often including your excess.
The important thing is not to assume that dealing with one takes care of the other. Settling your car through your insurer does nothing for your injury claim, and pursuing your injury claim does nothing for your car. They run in parallel.
What if the other driver was uninsured or unidentified?
This is where the gap between the two systems becomes clearest. If you are injured by a driver who cannot be identified, such as in a hit and run, or who was uninsured, the CTP scheme still protects you through the Nominal Defendant, which we explain in our guide on claiming against the Nominal Defendant after a hit and run or uninsured driver.
Property damage is different. There is no equivalent safety net that automatically pays for your car when the other driver is uninsured or cannot be found. If you hold comprehensive insurance, your own policy may cover the damage. If you do not, and the driver cannot be identified, you may have no practical way to recover the cost of your car, even though your injury is still covered by CTP. Where the at fault driver is known but uninsured, you can pursue them directly for the damage, though recovering money from an uninsured driver can be difficult. This contrast is one of the strongest reasons many people choose to hold comprehensive cover.
Different rules, bodies and time limits
Because they are separate systems, CTP and property claims run on different tracks in almost every respect.
CTP claims have tight early deadlines, generally 28 days to lodge for backdated income support and three months to claim, with common law damages proceedings generally needing to begin within three years. Property damage claims are governed by the terms of your insurance policy and, where you pursue an at fault driver directly, by the general law, which usually allows a longer period of up to six years to bring a claim.
How Stephen Young Lawyers can help
The overlap between these two systems is exactly where people lose entitlements, either by assuming their green slip will fix their car, or by focusing on their car and letting the tight CTP injury deadlines slip past. The injury side, in particular, is where the value and the time pressure usually sit.
An experienced personal injury lawyer makes sure your CTP injury claim is identified and lodged correctly and on time, so that concern for your damaged car does not cause you to miss the deadlines that matter most, and can help you understand how your property damage fits alongside it. Because the injury claim is often the larger and more time critical of the two, getting advice on it early is the priority.
If you want to understand the injury side further, we have guides on how to make a CTP claim in NSW, on statutory benefits versus common law damages, and on who can claim CTP in NSW. You can read about your broader options on our motor vehicle accident claims page. As an Accredited Specialist personal injury firm based in Sydney CBD, with a multilingual team and a No Win No Fee approach for eligible matters, we can review your situation and tell you where you stand.
No lawyer can promise you a particular outcome, and every claim turns on its own facts. What can be said is that your injuries and your car are two separate matters after an accident, and understanding which insurance covers which is the first step to dealing with both.
Speak with an experienced motor accident lawyer today
If you have been injured in a motor accident in New South Wales and are unsure how your CTP and your car insurance fit together, it is worth getting clear advice before the deadlines on your injury claim pass.
Contact Stephen Young Lawyers today for a free, no obligation consultation. Call us or get in touch through our website to speak with an experienced personal injury lawyer about your accident and your options.