Driving Without Insurance – What Happens in an Accident?

If you drive infrequently, are short on cash, or aren’t living in Australia full time, the thought of driving without insurance might have crossed your mind. After all, “it’s only for a week”. Or, “for a little trip to the shops to get milk”. And you wouldn’t be alone. As many as 1 in 4 Australians have said if they were strapped for cash they’d rather drive without insurance than use public transport.

What’s the worst that could happen?

Let’s break it down by type of insurance, legalities, and risk.

Driving without CTP insurance

Compulsory third party insurance (CTP) is, as the name suggests, compulsory. CTP is there to provide financial protection if you harm someone while driving in Australia. So if you had a collision with another vehicle or hit a pedestrian, you wouldn’t be financially responsible for any compensation to the people who’ve been injured might claim as a result of their injuries.

Driving without CTP insurance is illegal in all states and territories in Australia. If you’re found driving without CTP insurance, you could face a hefty fine. Plus if you’re involved in an accident, you could be held personally responsible for any financial claims that arise as a result of injury to other people.

That could add up to tens or hundreds of thousands of dollars, or even more.

Luckily, you can’t register a car in Australia without CTP insurance. So as far as CTP goes, you’re very unlikely to be driving without some kind of insurance. If you are, you’re breaking the law.

Driving without other types of third party insurance

As mentioned above, CTP covers you for compensation when it comes to bodily harm. But it doesn’t cover you for damage caused to other people’s vehicles or property. Nor does it mean you have protection in place for damage caused to your own vehicle or possessions.

You can mitigate this risk by taking out one of the other (non-mandatory) types of insurance. First up is third party property cover. This provides protection for damage your car causes to other people’s property or vehicles – so you have insurance if you accidentally ding someone’s car or crash into their wall. But it won’t cover your car. Only the other person or people’s cars and property.

Third party fire and theft car insurance offers everything that third party property does, as well as protection for your own car against fire or theft. But nothing else, like accidents that happen on and off the road.  

Can you drive without these types of insurance? Yes, legally. But you’re putting yourself at risk.

What about comprehensive car insurance in Australia? Where does that fit in?

Driving without comprehensive insurance

Comprehensive insurance is a whole other ball game to CTP and provides much fuller cover than its non-mandatory third party cousins.

Like third party property and third party fire and theft, comprehensive insurance isn’t legally required in Australia. But it affords drivers much fuller protection.

When combined with CTP, not only are you covered for injury to other people, you’re covered for damage you cause to their cars and their property AND you’ll have protection in place for your own car. After a simple excess payment (read about high excess vs low excess), your insurance provider will cover your car repairs or replacement in the event of an accident, weather event, fire or theft.

For detailed differences between the two types of “C’ insurances, see our comprehensive vs compulsory third party insurance article.

It’s important to know you aren’t breaking any rules or laws if you’re found to be driving without comprehensive insurance. You won’t pay a fine, go to jail, or anything along those lines. However, if there’s an accident it can still be a very messy situation. And an expensive one too.

Here are some of the possible consequences of driving without insurance of the comprehensive type.

What happens if you have an accident without insurance?

Assuming you only have CTP, what would happen if you were driving without insurance and had an accident of some sort?

If you’re found to be at fault for an accident and you don’t have insurance, you’ll likely be facing some pretty large bills (count those zeros!). Of course, your CTP would cover the other party’s medical bills. However, you could be liable for all other damages.

This includes the cost of damages or replacement to the vehicle or other property, towing costs, and possibly even loss of earnings if the other driver is unable to work for a period of time.

Even if their insurance pays out initially, you may find legal action taken against you in order to recover their costs.

Usually, your car insurance provider is there to foot the bill and cover you financially after such accidents. Legally it’s acceptable to be driving without insurance (except CTP). However, without comprehensive insurance you’re leaving yourself open to huge financial risk on the roads.

This is why affordable comprehensive car insurance from PD Insurance could give you the peace of mind you need to take that ultimate Australian road trip, do the school run with confidence, or simply hit the road without worrying about the possible financial implications.