Brokers have their work cut out for them as new findings revealed that less than half of Australians understand what their car insurance covers.
According to Smith's Lawyers, millions of Australians are unknowingly driving around without adequate cover as they’re under the mistaken belief that compulsory third-party insurance (CTP), green slip insurance, will cover for damages to vehicle or property caused as a result of an accident.
The firm's survey of 1,500 motorists revealed that only a third of drivers understand what CTP covers, while more than 65% of participants believe it covers them for both injury to others and damage caused to vehicles or property.
“We receive hundreds of inquiries every year from drivers holding CTP only who are not at fault in an accident but have been surprised to find they can’t claim for property damage,” said Greg Smith, principal and founder of Smith’s Lawyers. “The problem is worse when both drivers lack property damage insurance as there is no insurer to step in and cover the costs."
The survey found drivers aged 18 to 24 were the most impacted by the misconception, with only 19.4% of them correctly understanding the level and scope of CTP insurance.
State-wise, NSW drivers were found to have the highest overall awareness that CTP only covers injury to other drivers, and not property damage.
Written by Mina Martin for Insurance Business Magazine