Primary factors used by insurers
Insurers determine greenslip prices and State Insurance Regulatory Authority (SIRA) regulates them.
Insurers use different factors and apply different weightings to those factors to set the premiums they will charge.
Primary factors used by the insurers and which affect greenslip prices are:
- Geographic region
- Type of vehicle
- Age of vehicle
- Distance travelled
- Vehicle performance
- Age of vehicle owner
- Age and gender of youngest driver
- Driving history:
- Number of traffic offences
- Number of demerit points
- Number of years licensed
- Claims history:
- Level of insurance
- Number of at-fault claims.
SIRA designates geographic (rating) regions and vehicle classifications. There are five geographic (rating) regions:
- Sydney Metropolitan
- Outer Metropolitan
- Newcastle/Central Coast
Insurers are not allowed to differentiate on the basis of locality within a rating region.
Greenslip prices do vary. It is wise to shop around and compare prices.
Insurers submit proposed premiums to SIRA
Insurers must first submit proposed premium filings to SIRA, setting out proposed premiums and supporting information. Insurers must submit premium filings to SIRA at least once a year. They may also submit a non-compulsory filing if they wish to vary premiums at other times during the year.
SIRA may reject a filing if it considers the proposed premiums:
- will not fully fund the insurers liability
- are excessive, or
- do not conform with its Premiums Determination Guidelines.*
As the regulator, SIRA must ensure the scheme is competitive and greenslips are affordable:
- The scheme is competitive only if a sufficient number of insurers are motivated to participate.
- Insurers participate only if there is sufficient profit.
SIRA also operates a price comparison service, Green Slip Check.
* SIRA issues Premiums Determination Guidelines to regulate how greenslip prices are set. SIRA also regulates distribution and marketing of greenslips through the Market Practice Guidelines. Both are contained within the Motor Accident Guidelines 2017, available from SIRA.