Money Dilemma: What Happens When You Think You’re Covered (But You’re Not)?

To: Molly

Subject: Money Dilemma

Hey Molly,

This literally just happened to me a few weeks ago and I don’t want anyone else to go through it.

I honestly thought I was insured. I paid for my green slip, so I assumed that meant I was covered. I had no idea a green slip isn’t actually car insurance and that tiny misunderstanding turned into a $25,000 disaster.

I hit a parked car. No one was hurt, thank goodness, but when I called who I thought was my insurer, they told me I only had the green slip… nothing else. 

I ended up paying $17,000 to fix the other person’s car and $8,000 to fix mine.

That’s $25,000 out of my pocket, gone in one hit - all because I didn’t realise what I was (and wasn’t) covered for.

What makes it worse is that this was money I’d been saving for my property deposit. I’ve cried alot (ALOT) but it was my fault at the end of the day so I just need to move on. 

My emergency fund and my home savings are basically wiped out in one moment.

Please tell your community to check their cover properly. It takes two minutes and it could save someone from making the same very, very expensive mistake I just made.

Molly's Response:

I’m so sorry this happened to you, that must have been incredibly stressful. But thank you for sharing it, because so many people think they’re covered when they’re not, and your story is such an important reminder.

A lot of the confusion comes from the green slip. In NSW it’s called a Green Slip, but in other states it goes by different names, the TAC charge in Victoria, CTP in Queensland and South Australia, and the MAIB premium in Tasmania. Every state uses different wording, which makes it easy to assume you’re insured.

But the key thing is this:
All of these are only Compulsory Third Party (CTP) cover.

CTP covers injuries to people, passengers, pedestrians, cyclists or other drivers, but it does not cover damage to your car, someone else’s car, or any property you hit, including fences, buildings, shopfronts, power poles or council infrastructure.

That’s why actual car insurance is so important. Here’s the quick breakdown:

Comprehensive Insurance
Covers your car and other people’s cars/property, plus theft, fire, storms and vandalism.

Third Party Fire & Theft
Covers damage you cause to someone else’s car or property, and covers your car if it’s stolen or damaged by fire.

Third Party Property Insurance
Covers damage you cause to someone else’s car or property. It doesn’t cover your car, but it can save you from a massive bill if you accidentally hit an expensive BMW or high-end vehicle.

While you’re checking your cover, it’s also worth confirming that your driver’s licence is in date. Lots of people don’t realise theirs has expired, and driving with an expired licence can void your insurance.

And if money is tight right now, at the very least make sure you have Third Party Property Insurance. It’s the minimum level that protects you financially from a huge unexpected debt.

Thanks again for sharing your experience, it will absolutely help others avoid the same situation.