Recently a Scheme Review was announced for Queensland’s Compulsory Third-Party (CTP) insurance to ensure that it continues to perform well and in a stable manner. The Queensland CTP scheme is the most affordable CTP scheme of any state in Australia. However, as outlined in the Motor Accident Insurance Commission (MAIC) discussion paper in March 2023, whilst the scheme continues to perform well and in a stable manner, regular review is necessary to preserve the core elements of affordability and fairness and to identify opportunities for further improvement. The ongoing lack of price competition between the CTP insurers and the variance in insurer profitability was identified in the paper as a core area requiring review. This is because whilst the scheme remains profitable for licensed insurers at a whole-of-scheme level, the variance in individual insurer profitability is arguably bringing the stability and sustainability of the scheme into question.
What is CTP insurance?
Compulsory Third-Party (or CTP) insurance is a mandatory insurance policy that indemnifies vehicle owners and drivers who are legally liable for personal injury to any other person in the event of a motor vehicle accident. In Queensland, your CTP insurance will cover you for any personal injury caused by, through or in connection with, the use of the insured vehicle in an accident to which the Motor Accident Insurance Act 1994 (Qld) applies. It covers you for claims made against you by other road users including, but not limited to, claims made by drivers, passengers, pedestrians, cyclists, scooter riders, motorcyclists, and pillion passengers.
In Queensland, CTP insurance is included in your motor vehicle registration and covers the same period of time that your registration does. This means that every time you renew your motor vehicle registration, you remain covered. There are four providers of CTP insurance in Queensland, being AAI Limited (trading as Suncorp), Allianz Australia Insurance Limited, QBE insurance (Australia) Limited, and RACQ Insurance Limited (trading as RACQ Insurance). You can elect your preferred CTP insurer each time you renew your registration.
What does the Scheme Review mean for you?
Where a negligent driver involved in a motor vehicle accident is unregistered or unidentified, an injured person can still make a CTP claim through the Nominal Defendant. The Nominal Defendant is a statutory body established for the purpose of compensating a party injured because of the negligent driving of an unidentified or uninsured motor vehicle. It is important to note that in Queensland strict time limits apply to CTP claims and these time limits are even more stringent with claims involving the Nominal Defendant.
CTP insurance should not be confused with comprehensive motor vehicle insurance. CTP insurance does not cover damage to your vehicle, or the costs associated with any property damage that your vehicle may cause. Comprehensive car insurance will, however, cover any damage to your own insured vehicle and any damage that your vehicle may cause to other vehicles and property in an insured event covered by the policy. Comprehensive car insurance, in most cases, will also cover damage caused to your motor vehicle because of unexpected events such as fire, theft or weather events.
There are several insurance companies, in addition to those listed above, that offer comprehensive car insurance policies. This means that a party involved in a motor vehicle accident, may be required to deal with two separate insurance companies at the same time; one insurance company in relation to the CTP claim and another in relation to any property damage claim.
The role of CTP insurance is essential as it not only protects motorists but more importantly, it helps those injured on our roads. In Queensland we have a “fault” based scheme, which ensures that those injured in a motor vehicle accident, through no fault of their own, are adequately compensated for their injuries. The scheme supports the timely access to treatment and rehabilitation to assist an injured person in their recovery following a motor vehicle accident, regardless of the financial position of the individual who caused the accident.
The Queensland Government has made assurances that any review of the CTP Scheme will not consider changes to the scheme’s premium setting process or compensation benefits for people injured in a motor vehicle accident. It would be expected that the proposed Scheme Review will explore the current delays in the resolution of CTP claims and propose ways of reducing the duration time of CTP claims in Queensland.
If you are injured in a motor vehicle accident, you should seek legal advice early so that you are informed of your rights and aware of all applicable time limits. This is particularly the case when the negligent or “at-fault” vehicle is unregistered or unidentified.
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