CTP premium reductions don't make up for impact on injured motorists
23 May 2019
The Law Society acknowledges the Government’s recent announcement that CTP insurance will be reduced by up to $114.
This reduction in premiums (ranging from $46 to $114 depending on the CTP provider) is a result of the former Labor Government’s amendments to the CTP scheme, where they severely reduced compensation to the majority of injured motorists and privatised the scheme.
The Society’s main concern is that the reduction in premiums come at the expense of injured motorists, who have to deal with a scheme that fails to adequately compensate them for their injuries.
“It’s clear that the previous Government’s hollowing out of the scheme has made it irresistible to private insurers,” Law Society President Amy Nikolovski said.
“While lower premiums would be welcomed by motorists, it indicates that the pervious Government’s amendments to the CTP scheme went too far.”
“The previous scheme, operated by the Motor Accident Commission, was much fairer to injured motorists and still extremely profitable, as evidenced by the previous Government’s $1.6 billion sale of the MAC’s assets,” Ms Nikolovski said.
“Now that motor accident victim’s eligibility for compensation has been slashed, private insurers are set to reap enormous profits.”
The SA Parliament’s Social Development Committee’s recent review of the CTP scheme recommended changes to improve outcomes for injured motorists. The Law Society urges the Government to implement these recommendations.
The amendments that ought to be implemented are:
- Removal of the injury scale value threshold for non-economic loss. Currently, injured motorists need to sustain an injury severe enough to be assigned a value of “11” on the scheme’s injury scale in order to be eligible for compensation for pain and suffering. This means that many motor accident victims whose injuries have seriously debilitating effects on their quality of life miss out on compensation altogether.
- Appropriate compensation for pain and suffering. Even when motorists do sustain an injury that reached the injury scale threshold, the compensation they are eligible for is completely inadequate relative to their suffering.
- Removal of 20% discount on economic loss. When the economic loss of a motorist’s injury is assessed, the level of compensation available to the claimant is automatically reduced by 20%. This is plainly unfair.
“When a person who sustains a work injury is eligible for about 10 times the level of compensation than a motorist with the same injury is eligible for, there is clearly a problem with the CTP scheme,” Ms Nikolovski said.
“Now that this has been acknowledged by a parliamentary committee, it’s time that the Government took action to make it fairer.”