NSW unveils insurance pricing plan for ride-sharing

NSW unveils insurance pricing plan for ride-sharing | Insurance Business

NSW unveils insurance pricing plan for ride-sharing
New South Wales is set to become the first state in Australia to offer “dynamic premium pricing” for CTP insurance for taxis and ride-sharing drivers.

The state will use telematics technology to track drivers using ride-sharing services such as Uber and would price CTP premiums on “a new variable usage-based component” as the state continues its overhaul of the insurance scheme.

"We want NSW to be a smart state and that’s why we will use telematics to more accurately set CTP premiums for taxis and ridesharing vehicles," Minister for Innovation and Better Regulation Victor Dominello said.

"Using telematics, a form of in-vehicle technology already used by most operators, will allow us to record how often a driver is on the road, at what time of the day and how safely they drive. It will enable us to price Green Slip premiums accordingly."

Taxi drivers would see CTP green slip prices drop by up to 40% in what Dominello called “a massive win for NSW taxi drivers.”

Ride-sharing drivers pay class 1 premiums, ranging from $537 to $886 as taxis, which are almost 12 times more likely than average passenger vehicles to make a claim, pay an average premium of $7,800 per year.

Dominello noted that similar schemes to the New South Wales plan already exist in the United States as the state aims to create “a more level playing field” in the point-to-point transport market.

"We want to maintain low barriers to entry into the ridesharing market to encourage more competition and innovation. Consistent with this approach, ridesharing drivers will continue to operate in the general passenger vehicle class of the CTP scheme," Dominello continued.

"However, in the new system, ridesharing operators, such as GoCatch and Uber, will be required to make periodic premium top-up payments on behalf of their drivers based road usage and passenger trips. Similar top-up schemes exist in the US.

"These reforms will create a more level playing field between established and emerging participants in the point-to-point transport market.”

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