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At-Fault Driver Cover Benefits No Longer Payable - Conflict Between Scheme Reforms & Insurer Policy Documents

The second of two major reforms to the CTP greenslip scheme became effective today. That reform conflicts with the terms under which some insurers have offered special benefits to injured at fault drivers, with the consequence that those benefits are no longer payable.

For accidents occurring from today, the CTP greenslip scheme has been expanded to provide that at fault drivers will also be entitled to compensation through lodgement of an Accident Notification Form (ANF). Subject to the provisions, at fault drivers will be entitled to claim up to $5,000.00 for treatment expenses and for lost earnings by lodging an ANF. The NSW Government expects that this will result in an extra 4,000 claims per year.

The first reform, which became effective in July 2009, means that the cost of hospital treatment, transport by ambulance and other treatments for at fault drivers is funded by the CTP greenslip scheme.

Prior to the reforms, the at fault driver in a motor vehicle accident was not covered by the CTP greenslip scheme, unless the driver was catastrophically injured.

Full analysis of the scheme reforms is available on this site.

Five of the seven greenslip insurers currently offer at fault driver cover benefits whereby they pay specified benefits for specified injuries which the driver at fault may sustain in a motor vehicle accident. Those benefits are in addition to the statutory requirements. Analysis of the benefits on an insurer by insurer basis is available on this site. The benefits range from $10,000 to $300,000.

In our analysis of at fault driver cover and in our News article of 10 March 2010, we highlighted a conflict between the reform commencing today and the policy terms used by insurers in the at fault driver cover policy documents currently in place.

The conflict arises because the policy terms of the five insurers specifically exclude payment of a benefit under the at fault driver cover policy if the injured at fault driver is also entitled to or receives compensation under the CTP greenslip scheme.

Given the reforms to the CTP greenslip scheme, at fault drivers are entitled to compensation under the scheme. Until insurers alter the wording of their at fault driver cover policy documents, no benefit will be payable under those policies because the at fault driver is entitled to or has received compensation under the expanded CTP greenslip scheme. As at midday today, no insurer had revised it’s published at fault driver cover policy documents.

We will monitor and report on the position.