NSW drivers will save around $120 a year on their green slip bills as part of a long-awaited overhaul of the “unfair” system.
Sydney motorists currently pay the highest premiums in the nation – around $703 – while country drivers pay $482 for compulsory third party insurance.
In a bid to drive down those costs, the state government on Tuesday unveiled a plan which includes limiting compensation awarded to injured drivers.
Drivers who suffer whiplash or other minor psychological injuries will only be able to claim compensation for up to six months under the new scheme.
Those with serious injuries will only be able to claim lost earnings for two years, while motorists who are at fault in an accident will now be able to claim benefits for up to six months.
Lump-sum compensation will be retained for those with long-term injuries.
Ms Berejiklian says the new scheme will protect those with genuine injuries, as well as fix the “simply unfair” system which allows insurance companies to rort drivers.
“The only people who stand to lose from today’s reforms are the insurance companies that are making too many super profits from the scheme, and also people who are defrauding the scheme,” she told reporters in Sydney.
NSW motorists have the highest CTP premiums in the country but only 45 cents in every dollar paid for each green slip goes back to injured road users, with the rest divvied up into insurance company profits and legal fees.
Finance Minister Victor Dominello says the reforms will give the State Insurance Regulation Authority more power to monitor and “claw back” insurer profits.
“So that means if they (insurance companies) make super profits one year, the next year they’re going to get a haircut,” he said.
The CTP Green Slip Scheme changes will aim to reduce taxi premiums in metro areas by up to $3000 a year.
The insurance industry has welcomed the changes, with Insurance Council of Australia chief executive Rob Whelan saying the reform is long overdue.
“The ICA looks forward to reviewing the final legislation and assisting to develop the regulations and guidelines that accompany them,” he said in a statement.
A bill to legislate the changes – which will take effect by December – will be introduced to parliament this week.