Setting Greenslip Prices
Greenslip prices are determined by the insurers and are regulated by the State Insurance Regulatory Authority (SIRA) (previously the MAA).
Insurers each use different factors and apply different weightings to those factors to determine the premiums they will charge.
Primary factors used by the insurers and which affect greenslip prices are as follows:
- Geographic region
- Type of vehicle
- Age of vehicle
- Vehicle performance
- Age of vehicle owner
- Age of vehicle drivers
- Driving history
- Number of traffic offences
- Number of demerit points
- Number of years licensed
- Claims history
- Level of insurance and no claim bonus
- Number of at fault claims
Geographic regions and vehicle classifications are designated by SIRA.
There are five geographic regions. They are Sydney Metropolitan, Outer Metropolitan, Wollongong, Newcastle/Central Coast and Country. Insurers are not allowed to differentiate on the basis of locality within a designated geographic region.
SIRA issues Premiums Determination Guidelines as a mechanism to regulate the setting of greenslip prices. SIRA also regulates the distribution and marketing of greenslips through the Market Practice Guidelines. Both documents are available on the SIRA website.
Insurers are required to submit premium filings to SIRA, setting out proposed premiums and additional information in support of those premiums. SIRA may reject a filing of proposed greenslip premiums if it considers the premiums will not fully fund the insurers liability, if it considers the premiums to be excessive, or if the premiums do not conform with its Premiums Determination Guidelines. For the purposes of the act, a premium should be sufficient "to provide a profit margin in excess of all claims, cost and expenses that represents an adequate return on capital invested and compensation for the risk taken."
Insurers are required to submit premium filings to SIRA at least once a year. Additionally, insurers may notify SIRA that they wish to vary premiums at other times during the year by submitting a non-compulsory filing. Nine non-compulsory filings to vary premiums were submitted in 2010-2011 (Motor Accidents Authority Annual Report 2010-2011, page 72) compared to 8 in 2009-2010 (Motor Accidents Authority Annual Report 2009-2010, page 57), 11 in 2008-2009 (Motor Accidents Authority Annual Report 2008-2009, page 13), 20 in 2007-2008, 19 in 2006-2007 and 15 in 2005-2006 (Motor Accidents Authority Annual Report 2007/2008, page 14). The figures have not been published after the 2010-2011 year.
The issue for SIRA is to ensure that the scheme is competitive and that greenslips are affordable. The scheme will only be competitive if a sufficient number of insurers are motivated to participate. Insurers will only participate if there is sufficient profit.
Greenslip prices do vary.
It is important to shop around and compare prices.
SIRA operates a price comparison service, the Green Slip Calculator. A link to SIRA's price comparison service is on this site.