CTP Fraud and the NSW Gov't - "Red Light On Rorts"
A new Compulsory Third Party insurance system that introduces fixed compensation for minor injuries is being planned by the Baird Gov't in an attempt to cut the soaring cost of green slips
Better Regulation Minister Victor Dominello told the DT he also wanted to crack down on green slip fraud, which he said was responsible for adding $75 a year onto our CTP insurance bills.
Mr Dominello said CTP prices had risen by more than $40, or 8%, in the past year, and insurance fraud was a key contributor.
He said the government was seeing fraudulent court claims for minor injuries, including claims for more people in one car than there are seats in that said car, and instances in minor low-speed prangs where claims are made on behalf of babies for psychological injuries and future loss of income.
These claims are costing on average, between $95,000 and $100,000.
The average green slip costs more than $600 and exceeds 34% of average weekly earnings, up from 28% in 2007.
The reforms, to be introduced later this year, would involve a two-tiered system, where less serious claims involve set payouts, as occurs with the workers compensation scheme.
Lawyers have a vested interest in opposing the reforms, and insurance companies are accused of profiting by as much as 20%.
"Both the insurance sector and the legal fraternity will need to come together with the government so we are all acting in the interests of the consumers," Mr Dominello said.
"In this case, it's the interests of the motorists and those injured."
Another change could be a "no-fault" scheme similar to Victoria to prevent costly legal battles where people argue over who's to blame.
CTP prices for the average Sydney motorist have increased by more than 70% on average since 2008.
Further prices of between $60 and $90, or between 10 and 15% have been flagged by insurers , who say they need the additional money to offset increasing claims, including those by fraudsters.
Reported by Andrew Clenell