Greenslips News

In our News article of 1 April and in our analysis of at fault driver cover, we identified issues with the payment of at fault driver cover benefits for accidents occurring after 1 April 2010.

As at 15 October 2010, those issues remain for some insurers.

This site was the first to identify and articulate the issues.

Here are the facts.

Prior to 1 April 2010, the driver at fault in an accident was not covered under the CTP greenslip scheme unless the driver was catastrophically injured.

1. Five of the seven greenslip insurers offer an additional feature with greenslips, generally referred to as at fault driver cover.
   
   
2. At fault driver cover means that insurers pay the at fault driver specified benefits for specified injuries which that driver may sustain in an accident. Benefits vary, but are typically around $50.000.00.
   
   
3. Each insurer provides a policy document setting out the terms on which at fault driver cover benefits will be paid.
   
   
4. Effective from 1 April 2010, the State Government amended the Motor Accidents Compensation Act 1999 so that injured at fault drivers became entitled to compensation up to a maximum of $5,000.00. The legislation to amend the scheme was introduced in May 2009.
   
   
5. As at 1 April 2010 the insurer’s policy documents stated that no at fault driver cover benefits were payable if the injured at fault driver also received or was entitled to receive compensation under the Act.
   
   
6. Therefore, on the basis of policy wording, no at fault driver cover benefits were payable from 1 April 2010, yet insurers continued to market the benefits of those policies.
   

As at 15 October 2010:

1. NRMA and QBE have updated policy terms so that at fault driver cover benefits are payable.
   
   
2. GIO has stated publicly and on its website that it does not intend to apply the terms of the policy document so as to exclude at fault drivers from accessing benefits and that policy terms will be amended to ensure this is clear.
   
   
3. On the basis of the Allianz policy document, benefits are not payable because the injured at fault driver is entitled to the compensation under the Act.
   
   
4. On the basis of the Zurich policy document, benefits will not be paid if the injured at fault driver receives compensation under the Act.
   

We will continue to monitor the position and will update this site as necessary.

Greenslip prices for cars in NSW are on the move from 1 July 2010!

We have surveyed greenslip prices for class 1 vehicles (motor cars) in the Sydney Metropolitan and Country areas as at 30 June 2010 and 1 July 2010.

The results, showing the average change in price between those two dates are set out in the table below.

The largest price increase found in the survey was 10.9% and the largest decrease found was 12.7%.

The survey also found that the benefits of shopping around to compare prices increase with age. The average saving for a 25 year old owner was found to be $35.42 whereas the survey found that the average saving for a 65 year old owner is $218.32.

The average savings established by the survey are set out in the table below.

The trends shown in the tables are based on a sample of greenslip prices as at 30 June 2010 and 1 July 2010. Greenslip prices change over time and in every case need to be checked on the basis of specific vehicle and owner details.

Classification of motorbikes for determining CTP greenslip prices in NSW is changing from 1 July 2010. The new classifications will result in significant greenslip price changes for many owners, some up and some down.

For greenslip purposes, motorbikes are classified on the basis of engine capacity. The classifications are designated by the Motor Accident Authority of NSW for use by greenslip insurers. Greenslip insurers apply those classifications, along with consideration of other factors such as location, claims history, driving record and rider age, to determine greenslip prices.

Until 30 June 2010 three classifications apply:

i) Under 100cc
ii) 101cc to 300cc
iii) Over 300cc

From 1 July 2010, five new classifications will apply:

i) Under 225cc
ii) 226cc to 725cc
iii) 726cc to 1,125cc
iv) 1,126cc to 1,325cc
v) Over 1,325cc

The change in classifications is designed to allow more levels of price differentiation for risk based on engine capacity and claims experience. Clearly, one classification for all motorbikes above 300cc is too wide.

The new classifications do not include consideration of other risk characteristics such as the type of motorbike or pillion capacity.

The new classifications result in a major realignment of prices. Some motorbike owners will benefit from sizeable decreases in greenslip prices, whilst others will be required to pay significantly more.

We have surveyed prices as at 30 June 2010 and 1 July 2010 for a range of motorbikes in the Sydney Metropolitan and Country areas. The results, showing the average change in price between those two dates are set out in the table below.

Hardest hit will be motorbikes at the bottom of the 226cc to 725cc classification, such as 250cc motorbikes. 250cc motorbikes were previously classified with 101cc to 300cc motorbikes. For a 250cc motorbike the survey shows an average increase in price of 88.9% in the Sydney Metropolitan area and 107.3% in Country areas.

The survey shows that prices have increased in the three classifications for motorbikes above 726cc. The average increase in price for an 800cc motorbike is 5.2% in the Sydney Metropolitan area and 1.9% in Country areas. The average increase in price for a 2,000cc motorbike is 19.8% in the Sydney Metropolitan area and 13.0% in Country areas.

Motorbikes in the 1,126cc to 1,325cc classification have shown a higher average increase in price than other large capacity motorbikes. For a 1,200cc motorbike the survey shows an average increase in price of 34.9% in the Sydney Metropolitan area and 24.6% in Country areas.

The biggest winners are motorbikes in the upper range of the 226cc to 725cc classification, such as 400cc and 650cc motorbikes. Those motorbikes were previously classified with all motorbikes over 300cc. For both 400cc and 650cc motorbikes the survey shows an average decrease in price of 27.3% in the Sydney Metropolitan area and 29.6% in Country areas.

Some small capacity motorbikes under 225cc will also benefit. For a 125cc motorbike (such as a scooter) the survey shows an average decrease in price of 9.9% in the Sydney Metropolitan area and 3.9% in Country areas.

Interestingly, the survey also shows that for an older rider with good claims and driving records, the benefit of shopping around to compare prices will in some cases save several hundred dollars, whereas for a young rider with bad claims and driving records, the benefit of shopping around will generally be less than $20.00.

The trends shown in the table are based on a sample of greenslip prices as at 30 June 2010 and 1 July 2010. Greenslip prices change over time and in every case need to be checked on the basis of specific motorbike and owner details.

Comment at our Blog. Tell us how the chages will affect you. What is your opinion on the new classifications?

In our news article of 10 March 2010 we released news of the reforms to the CTP greenslip scheme.

The first reform provides that hospital treatment, transport by ambulance and other treatments for at fault drivers is funded by the CTP greenslip scheme. The second reform, effective for accidents occurring from 1 April 2010, provides that at fault drivers will also be entitled to compensation through lodgement of an Accident Notification Form (ANF). Subject to the provisions, at fault drivers will become entitled to claim up to $5,000.00 for treatment expenses and for lost earnings by lodging an ANF.

The NSW Government has today issued a Press Release announcing the second reform. A copy of that Press Release is available.

Interestingly, the Press Release does not deal with the issue we raised in our news article. That is, the impact on At Fault Driver Cover Policies offered as an additional benefit by some of the insurers. There has been no change to this point. We will monitor the position.

Detailed analysis of the legislation changes and the impact on the CTP greenslip scheme is available on this site.