Under the Barr government’s proposed compulsory third-party (CTP) insurance scheme, injured drivers would have to pay an excess to challenge insurers’ assessment of their injuries – changes even insurance companies tagged as unfair.
While the new model allows anyone injured in a car accident access to treatment and care for up to five years regardless of fault, only those that reach the 5% whole-of-person impairment threshold can sue for extra benefits.
In a submission to the ACT Legislative Assembly inquiry into the proposed scheme, Insurance Australia Group (IAG) said the process for determining who is eligible for the extra compensation is both complex and unfair, Canberra Times reported.
The insurance giant underwrites 164,000 CTP insurance policies in the ACT under the NRMA brand.
"Injured people will be required to take in complex information upon which they will be required to make decisions that have potentially significant financial impacts upon them,” IAG said. “All of this while they are dealing with the effects of their injuries. It is also likely that the complexity of the process will cause injured people to seek the assistance of a lawyer, for which no legal costs may be payable by the insurer."
IAG was particularly concerned that requiring injured people to pay excess to challenge the insurer’s assessment that there was no permanent impairment disadvantages those with lesser financial means.
"Enforcing this process and collecting/recovering excess amounts would be administratively difficult and expensive, to say nothing of the impact on the relationship between the injured person and insurer," said the Sydney-headquartered insurance group.
The excess would likely amount to $500 or one-quarter of the assessment fee, whichever is higher.
"An excess payment for the independent assessment is only required where the injured person requests the independent assessment even though they are not considered to have any likely permanent impairment as a result of their accident," a government spokeswoman told the Times. "The excess payment is fully refundable if the injured person’s whole-person impairment assessment by an authorised independent medical examiner determines the injured person has some permanent impairment (e.g. more than 0%)."
IAG also slammed the decision to cut income benefits for injured people who were at retirement age plus 26 weeks, saying it was “an unjust outcome for injured people who continue to work past retirement age by choice or need" to not receive income replacement if they were unable to work because of their injury.
The spokeswoman said the cut-off was in line with statutory motor-accident schemes and workers’ compensation schemes in other jurisdictions, and had been included in the model chosen by the citizens’ jury.
"At this point, people can access the Commonwealth-age pension and/or their superannuation benefits to provide income," she told Canberra Times. "Older people with more serious injuries, and are not at fault, can still make a common-law claim for damages including for any lost income."
IAG also hit out at the provision preventing injured people from claiming damages for lost earnings in the first year after the accident, saying it would not only keep people who were out-of-work for reasons like unpaid maternity from recovering those lost earnings, it would also leave injured people out-of-pocket on superannuation, Canberra Times reported.