I welcome the NSW Government’s overhaul of the Compulsory Third Party Motor Accident Insurance Scheme to make it fairer and more affordable for road users.
The new scheme will provide defined benefits to all people injured in motor accidents, removing the need for claimants to prove to an insurer who was at fault. Under the Government’s proposal, defined benefits would be introduced for low severity injuries, with lump sum compensation retained for the most seriously injured.
The current scheme has not been overhauled in 16 years, leaving NSW motorists paying the highest premiums in the country with the average green slip costing in excess of $600. A spike in low severity claims, such as whiplash and soft tissue injury, has put significant pressure on green slip prices. Without reform, premiums are expected to rise 10 to 20 per cent.
The scheme does not currently represent value for money for motorists, with only 45 cents in every dollar paid in Green Slip premiums going to injured people. The rest goes to insurer profits, legal fees, medical expenses and other schemes costs.
People who are more seriously injured will continue to have access to the common law system where another driver is at fault. Medical and care costs will be available to those injured people on an ongoing basis.
Minister for Innovation and Better Regulation Victor Dominello said the new model was a significant win for motorists, the majority of whom can expect lower premiums once the scheme takes effect.
An expert reference panel, chaired by former NSW Government Minister John Della Bosca and Deputy Chair of the State Insurance Regulatory Authority Board Nancy Milne, will make recommendations on the detail of the enabling legislation, to be introduced into NSW Parliament later this year.
Subject to Parliament’s approval, the new scheme could come into effect from July 2017. Further information is available at www.greenslipreforms.nsw.gov.au.