Last week the NSW Government announced its plans to reform compulsory third-party insurance.
The aim is to make it simpler and more affordable for motorists in NSW and to provide fairer access to benefits for all road users.
What will the changes mean?
In the future, if a person's injured in an accident on NSW roads and their injuries are minor, they’ll receive immediate assistance to cover their medical expenses and loss of income for a specified period, without having to prove who was at fault.
Anyone more seriously injured will receive lump sum payments.
The need for reform
The current scheme, with its focus on determining who's ‘at fault’ has led to extended legal cases, delays of claim settlements and higher green slip premiums.
This reform plans to increase the benefits provided to the most seriously injured road users and reduce the time it takes to resolve a claim.
It also aims to lessen the amount of claims fraud and exaggeration and bring down the cost of Green Slip premiums.
The Minister for Innovation and Better Regulation, Victor Dominello said the State, following a review, would move to a hybrid no-fault scheme, which introduces defined benefits for low severity injuries and access to common law damages for more serious injuries.
For the first time, it will also extend protection to an extra 7,000 road users each year who are not covered under the current ‘at fault’ scheme.
Insurance fraud and high premiums
Mr Dominello said reform was necessary because minor injuries such as whiplash had risen to 40% of all compensation claims and there had been a large rise in insurance fraud.
“It’s absolutely not fair right now that NSW motorists are paying the highest premiums in the land,” Mr Dominello said.
Insurers welcome change
IAG (Insurance Australia Group), which owns NRMA Insurance has welcomed the plan.
“This is a major step forward in ensuring we have a sustainable scheme that puts our customers first and focuses on prevention and recovery, rather than compensation,” IAG executive Anthony Justice said.
NRMA Insurance is the biggest CTP/Green Slip Insurance providers in NSW.