Driving an uninsured vehicle in a public place or on a road can lead to some serious consequences, both financially and legally. In Australia, it is mandatory to have compulsory third-party (CTP) insurance. To answer the question, “Is it illegal to drive without insurance?” it is important to note that driving without insurance in Australia can lead to hefty penalties. Also, the driver (or vehicle owner) could be held personally liable for any injuries to other people on the road. It does not matter whether you are a seasoned driver or new behind the wheel; driving without CTP insurance is illegal in Australia.
What Happens in a Car Accident Without Insurance?
While driving without compulsory third-party (CTP) insurance in Australia is illegal, the consequences of a car accident vary depending on who was at fault.
If You’re at Fault
If you are deemed “at fault” by the other driver and their insurer, they will ask you to compensate for all the damages the other driver has sustained. You are most likely to pay the compensation from your own pocket if you do not have car insurance.
The compensation should be able to cover the repair cost of the damaged vehicle, towing fees, the rent of a replacement car, and any other expenses caused by the accident. You will get a letter or a phone call from the other driver’s insurer, asking you to pay the cost of the repairs.
However, if both parties do not have car insurance, neither of them will be able to make a claim. In that case, it is recommended that you settle the repair cost directly with the other party.
If You’re Not at Fault
If you can prove that the other driver’s negligence caused the accident, you may still have a chance of recovering compensation for the damage even without insurance. With the help of your car accident lawyer, you can pursue a claim against the insurance company of the at-fault driver.
Since you do not have insurance support to determine fault, you will have to collect strong evidence yourself to strengthen your claim. So, you must file a police report, exchange information with the other driver and witnesses (if there were any), and document the scene.
If you were injured in the accident caused by the other driver’s negligence, you may be entitled to compensation for treatment, ongoing medical expenses, pain and suffering, and loss of earnings. If the at-fault driver was also driving an uninsured vehicle, you would have to settle the compensation in private. Hopefully, this answers your question, “Is car insurance compulsory in Australia?”
The Penalties for Driving an Uninsured Vehicle Vary Across Australia
In Australia, you will face some strict penalties if you are caught driving an uninsured vehicle. These penalties vary across different states in the country.
Queensland
If a person drives, or allows another person to drive, an uninsured vehicle in a public place or on the road, they face a maximum penalty of a fine of 80 penalty units ($10,676).
New South Wales
If a person drives or parks an uninsured vehicle on a road or road-related area, they face a fine of $697.
Victoria
When a person is found using an uninsured vehicle in Victoria, they are charged a fine of $826.
Australian Capital Territory
If a person uses or allows another person to use an uninsured vehicle on a road or road-related area, they face a maximum penalty of a fine of 50 penalty units ($8000).
Western Australia
When a person is found using, or allowing another person to use, an uninsured vehicle on a road or road-related area, a maximum penalty of a fine of 50 penalty units ($8000) applies to them.
South Australia
If a person drives an uninsured vehicle in South Australia, allows an uninsured vehicle to stand on a road, or owns an uninsured vehicle that is driven or found standing on a road, they face a maximum penalty of a $10,000 fine.
Northern Territory
If a person drives an uninsured vehicle for one month or less, they face a fine of $300. If the vehicle has been uninsured for more than one month but less than 12 months, the fine is $800. If the vehicle has remained uninsured for 12 months or more, it leads to a fine of $1500.
Tasmania
If a person uses or allows another person to use an uninsured vehicle on a public street, they face a maximum fine of 20 penalty units ($3440). For a second or subsequent violation, the maximum penalty is a fine of 40 penalty units or imprisonment for 3 months.
The Risks of Driving without Insurance in Australia (Beyond Penalties)
While there is a significant amount of penalty in place for driving without insurance in Australia, there are plenty of other risks of driving a vehicle without CTP insurance. If you are involved in an accident while driving an uninsured vehicle, you could be held personally liable for the damages or any injuries caused to other road users.
If you have damaged property while driving a vehicle without the CTP insurance, you will be financially liable for the cost of any repairs to your own vehicle, other vehicles involved in the accident, and any other property damaged in an accident. Since you do not have the insurer’s support, you will have to pay for the damages and repairs from your own pocket.
Types of Insurance in Australia
If you own a vehicle in Australia, you will need several types of insurance to save you from various expenses after a car accident.
1. Compulsory Third-Party (CTP) Insurance
Having CTP insurance is a must for all vehicle owners in Australia. It compensates people injured on the road when your vehicle is involved in the accident. As mentioned, it is illegal to drive anywhere in Australia without CTP insurance. In some states, CTP insurance is added to the cost of your vehicle registration. It does not cover damage to other people’s property, damage to your vehicle or property, and fire or theft of your vehicle.
2. Third-Party Property Insurance
Third-party property insurance covers you for the damage your vehicle does to other people’s property in case of an accident. When you are at fault in the accident, your third-party property insurance will pay for repairs to other vehicles and property. However, it does not cover damage to your own vehicle or property or fire or theft of your vehicle.
3. Third-Party, Fire, And Theft Insurance
This insurance is similar to the third-party insurance mentioned above. With this type of insurance, you will also be covered if your vehicle is lost or damaged due to fire or theft. This insurance does not cover damage to your vehicle or property in an accident.
4. Comprehensive Insurance
Comprehensive vehicle insurance covers all the areas mentioned above, including damage to your vehicle or property if you are at fault. Some insurers also offer additional benefits along with comprehensive coverage. So, it is recommended that you go through the policy documents and understand what kind of coverage you get. Even though it is a comprehensive insurance policy, you will not be covered if you breach your insurance policy. For example, if you are driving over the legal limit for alcohol consumption, the insurance won’t cover damages caused by your vehicle.
What Insurance Do You Need?
In Australia, you can opt for several different types of insurance for your vehicle. You can choose the right level of insurance based on your circumstances. However, it is always a good idea to have some level of optional insurance to cover third-party property damage.
If you do not have third-party property cover, you may end up paying tens of thousands of dollars (or even more) to compensate for the damages to others’ vehicles and properties caused by your vehicle. For peace of mind, comprehensive car insurance is the best choice, as it covers almost everything that may happen on the road.
Conclusion
Driving an uninsured vehicle in Australia can put you in deep trouble, both financially and legally. While you should definitely have CTP insurance for your vehicles, it does not cover all damage your vehicle may cause in an accident. So, it is important that you consult a professional and find out the right level of insurance before you put your vehicle on the road.
