You should arrange insurance on the vehicle you are receiving before the keys change hands. The moment you take possession of a vehicle, you are responsible for any damage or loss — even if the registration has not yet been transferred. Comprehensive insurance on the incoming vehicle should be in place from the handover moment. In Queensland, compulsory third party (CTP) insurance is tied to the registration and transfers with the vehicle, but comprehensive cover is separate and is your responsibility to arrange.
In a vehicle swap, you take legal possession of the incoming vehicle when the keys change hands. From that moment, you bear the risk of any accident, theft, or damage to that vehicle — even though the registration may not yet be transferred to your name.
If the vehicle is damaged between key exchange and transfer lodgement, and you do not have insurance in place, you have no cover for the loss.
Compulsory third party (CTP) insurance is mandatory in all Australian states and is tied to the vehicle's registration, not to the owner. In Queensland, CTP is bundled into the registration fee. When a registered vehicle is transferred, the CTP cover moves with the vehicle for the balance of the registration period.
This means you do not need to arrange separate CTP insurance — it transfers automatically with the registration. However, the registration must be current for CTP to be active. If you receive an unregistered vehicle, there is no CTP cover until you re-register it.
Comprehensive insurance (which covers damage to your own vehicle as well as damage you cause to others' property) is not mandatory but is strongly recommended.
You should: 1. Contact your insurer before the handover date and arrange a policy on the incoming vehicle 2. Confirm the policy is active as of the handover date and time 3. Have written confirmation of the cover before you exchange keys
Most insurers can arrange cover quickly — often within a few hours or on the same day.
Comprehensive insurance for 4WDs and utes can be more expensive or have exclusions for off-road use. Check the policy terms carefully before exchanging keys, particularly if you intend to use the vehicle off-road.
Your insurance on the vehicle you are giving away should remain active until the transfer is lodged and confirmed. In the window between key exchange and transfer lodgement, there is technically a period where neither party has clear insurance on each vehicle — plan carefully to avoid this gap.
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