Last updated 16 August 2016 This chapter is currently under review.
There are different types of insurance policies for motor vehicles:
- compulsory third-party insurance
- comprehensive insurance
- third-party property damage insurance.
Compulsory third party insurance
Compulsory third party (CTP) insurance is paid when a motor vehicle is registered. It covers the owner and driver of a vehicle for claims for damages for personal injuries arising out of motor vehicle accidents. If the car responsible for an accident is unregistered or cannot be identified, the Nominal Defendant of Queensland stands in the place of the CTP insurer.
It is necessary to establish another person’s negligence caused a motor vehicle accident in order to succeed in a claim against the CTP insurer. Some CTP policies also include modest benefits for an injured driver if they are found to have caused the accident (driver-at-fault insurance).
Comprehensive insurance covers the owner and/or driver of a motor vehicle for property damage claims by other persons, and also covers the owner for damage to their own vehicle, regardless of who caused the accident. Some policies also provide cover for hospital and medical expenses, and pay a benefit if the owner is killed or seriously injured while driving the insured car (driver protection insurance).
Third-party property insurance
Third-party property insurance covers the owner or driver of a vehicle for damage to other persons’ property but not their own. Every owner of a motor vehicle should have at least this level of cover.
Losing the right to claim
It is important to read the terms of the policy carefully. Most comprehensive and third-party property policies contain special conditions which, if not complied with, could result in rejection of the claim by the insurance company.
Failure to report the accident
Most policies require the insured person to report any accident or damage as soon as possible after the accident occurred or the damage was sustained. Even if the owner/driver does not intend to make a claim on the insurance, it is still advisable to notify the insurer of the accident in order to protect their rights. Strict notice requirements apply for personal injury claims.
With respect to property damage claims, failure to report the accident to the insurer may not invalidate the policy. However, the insured may be required to pay the insurer any legal costs incurred unnecessarily as a result of the failure to notify the insurer.
Most insurance policies stipulate that no cover will be provided if, at the time of the accident, the driver was under the influence of alcohol or drugs. The terms of the exclusion will vary between policies but could provide that the insurance cover will be invalidated if the driver fails a breathalyser test or is convicted of failure to supply a specimen of saliva or blood for testing.
Most policies exclude cover if an unlicensed driver was driving the vehicle at the time of the accident.
History of insurance claims
When taking out insurance, it is essential that all questions asked by the insurance company in the proposal form be answered carefully and truthfully. Questions about the owner’s past driving record must be answered fully and honestly, otherwise the insurer may have grounds to reject a subsequent claim.
Alteration of the vehicle
The modification of a car or the attachment of accessories can invalidate the insurance cover under some policies. Any modifications or accessories of a mechanical nature must be disclosed to the insurer and specifically covered by the insurance.