IT has never been cheap to operate a car in Australia but this week’s announcement of an average increase of $50 average to the cost of a green slip has shocked some Highlanders.
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The increase was put forward by several insurance companies which have threatened to pull out of compulsory third party (CTP) insurance if the government did not approve it.
The changes mean a current average CTP bill of $528 would rise about 10 per cent to $578 per vehicle.
Families, such as the Munro’s, who have two cars, could be being almost $1200 next year for their green slips.
"It’s hard enough when you’re like me and have to rely on the weather and clients turning up to earn your income, but this extra hundred dollars will make things tough," Brett Munro said.
"My wife has just graduated from university so she hasn’t been working a lot and we have three children which means school fees and sports fees and everything else.
"We seem to be paying insurance for everything these days."
CTP insurance is paid from the annual green slip car registration bill to compensate anyone injured in a motor vehicle crash where they are not at fault for the accident.
However, it has been revealed that only about 50 cents in the dollar has been getting to the victims.
The state government has admitted that the scheme is "unsustainable" and that some accident cases were taking "a ridiculous" period of time to settle.
Kiama MP Gareth Ward said that scheme would be reviewed with the aim of speeding up accident claims and putting downward pressure on premiums.
"Motorists in NSW are paying about $500 a year for CTP insurance and this is up to $260 more than that paid in some other states, largely because of the time it takes to settle some accident disputes,” he said.
"Research shows that major accident cases can take up to 8 years to settle and in some cases, legal fees and medical costs are so high that lawyers walk away with more dollars than the claimants.
"I would like to see us work towards an improved scheme which compensates the injured and keeps insurance premiums low.
"This review is about fixing the scheme to ensure those who deserve compensation are not forced to wait years for a resolution and to make premiums more affordable for motorists."
However, Law Society of NSW president, John Dobson, said the scheme was not broken.
"We believe that the current system contains areas where administrative efficiencies could result in the reduction of significant costs in the operation of the scheme," he said.
"Any review of the scheme should extend to insurer profits from CTP as recommended by the latest report from the Legislative Council Standing Committee on Law and Justice.
"The fact is that CTP premiums subsidise public hospital and ambulance costs and cover the Lifetime Care Support Scheme in NSW which inflates the cost of CTP.
"The Law Society supports this Scheme but, for this reason, it is unfair to compare the cost of our premiums to the premiums in other states which do not have these added benefits."
He added that the Motor Accident Authority’s latest Annual Report stated that, for the 2012 financial year, the proportion of premiums that went to claimants as benefits was 64 per cent, not 50 per cent as stated by the government.
