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New CTP scheme refocuses on injured people

Drivers in NSW know they pay the highest CTP premiums in Australia. Their premiums have increased some 85% in 10 years. Reform to the NSW CTP scheme has been a long time coming. But finally, Premier Gladys Berejiklian and Minister for Finance, Services and Property Victor Dominello announced some detail on 7 March.

All injured road users

The main change is all injured road users, whether at fault or not in an accident, get benefits in the first 6 months. They will be able to claim weekly income payments if they need time off work, medical and treatment expenses and commercial home care.

After 6 months, only people who were not at-fault or whose injuries were not minor can keep getting benefits. They can also make common law claims.

Those with moderate injuries will be able to claim 2 years’ weekly income. Or up to 3 years if they make a common law claim, plus reasonable medical, treatment and care expenses.

The seriously injured can claim up to 5 years’ weekly income plus reasonable medical and treatment expenses for life. They will be able to make a common law claim that includes pain and suffering as well as past and future economic loss.

Objectives of reform

There is a good reason for setting benefits for minor injuries rather than negotiating lump sums. It will provide injured people support straightaway and reduce the costly process of negotiation. This should push down the price of green slips.

Minister Dominello claims the reformed CTP scheme will:

  • Give legitimately injured people faster access to benefits
  • Reduce exaggerated claims
  • Pay more of each premium to the more seriously injured
  • Make green slips up to $120 cheaper.

The legislation, if passed, will give more power to State Insurance Regulatory Authority to deal with fraud and “monitor and regulate” insurer profits. Insurer profits are around 19% each year, rather than the 8% stated to the regulator.

Government aims to reduce taxi premiums by up to $3,000 a year from around $7,500. It plans to charge premiums according to how far taxis and other point-to-point vehicles like Uber, actually travel. This may result in higher green slip prices for some Uber drivers.

The legislation is not due to start until December 2017. Until the legislation is public and new compensation levels are introduced, nobody knows what green slips will cost.

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