Canberra car insurance premiums expected to take a cut

Canberra car insurance premiums expected to take a cut | Insurance Business

Canberra car insurance premiums expected to take a cut

The Canberra territory government is set to release its proposed legislation for an overhaul of compulsory third-party (CTP) insurance, which is expected to see premiums cut by up to $171.

A new no-fault scheme will cover anyone injured in a motor accident for up to five years and could reduce motor premiums by between $91 and $171 each year – affecting 285,000 cars registered in the ACT, reports ABC News.

Under the current system, which is said to charge some of the highest premiums in Australia, only those that are not at fault in an accident are covered. But the new system will see coverage available regardless of who is to blame. That should result in 40% more Canberrans who are injured in motor accidents being covered.

According to the report, CTP coverage costs an average of $591.20 per year in Canberra, which is almost $100 higher than the national average of $495.50.

Currently, injured Canberrans who are not at fault access payouts under common law, which can result in several years of waiting to receive payments.

It is not yet confirmed whether drivers will receive a rebate for higher premiums that have already been paid, but the government has said that insurers should not pocket that money, the report stated.

The legislation is modelled on a scheme chosen by the territory’s first citizens’ jury. A group of nearly 50 Canberrans were selected to form the jury which helped develop the laws, in one of the first attempts at deliberative democracy by the ACT Government.

Jurors were selected from a pool of respondents to invitations that were sent out to 6,000 Canberrans, and were paid $450 to attend three weekend sessions, ABC News said. During the final weekend, just shy of two-thirds of the initial 49 jurors selected voted for the chosen model, which was the most radical option of four that were presented to the jury.

Nine of the initial group of 49 jurors did not make it to the final weekend, reportedly mainly due to personal reasons, while seven jurors voted for an alternative option and one juror walked out.

Under the proposals, insurers’ premiums will be regulated by the Motor Accident Injuries Commission, which will act on independent advice.