Minister for Finance and Services Greg Pearce said today the NSW Compulsory Third Party (CTP) scheme will be reviewed with the aim of speeding up accident claims and putting downward pressure on premiums.
Mr Pearce said the current CTP scheme is costing the people of NSW too much money and some accident cases are taking up to 8 years to settle.
“At the moment, motorists in NSW are paying on average $500 a year for CTP insurance and this is up to $260 more than that paid in some other states,” Mr Pearce said.
“The scheme is expensive compared with other states largely because of the time it takes to settle some accident disputes.
“We know that some CTP insurers in NSW are looking at increases of up to 10 per cent in premiums this year and something needs to be done to stop costs spiralling any higher.
“Research shows that major accident cases can take up to 8 years to settle and in some cases, legal fees and medical costs are so high that lawyers walk away with more money than claimants.
“What we need is a scheme that compensates the injured and keeps the cost of premiums low.
“The current scheme is inefficient – less than 50 cents of every dollar paid in premiums paid actually goes to those who are injured,” he said.
Mr Pearce said it’s too early to say what changes are needed or what options being considered.
“I have asked the NSW Motor Accidents Authority to look at issues such as insurer and legal costs and CTP rates with the view to creating a fairer scheme.
“This review is all about fixing the scheme to ensure those who deserve compensation don’t have to wait years for a resolution and to make premiums more affordable,” he said.