Our New South Wales motorcycling friends stand to be badly affected by the potential implementation of massive reductions in the Greenslip benefits available to them. This is bad news for the group most seriously injured by the negligence of blind-eyed car drivers, and a poor choice by our government.
Why are these changes to Greenslip benefits being considered?
The government is trying to score points by reducing Greenslip prices by a modest amount, but should they really be doing this by reducing the rights available to one of the most vulnerable groups on our roads?
Think of it this way. Your comprehensive insurance policy can cost in the realm of $1200 to ensure around $15,000 of vehicle damage. For a modest $700 each year,your Greenslip insures you for damage to another person, including family and friends, for up to $20,000,000.
Is there another life insurance policy available that can offer anything like that kind of protection for such an affordable rate?
Why are New South Wales Greenslip prices so high to begin with?
No one is asking that question, or owning up.
New South Wales does have the best and fairest motor injury scheme in the country. This makes premiums a little higher, but it is most definitely worth it for the high level of benefits received.
On the other hand, most insurers have been raking in profit margins of 18-19% for years, against a guideline margin of 8%. What we should be asking is why and how this has happened.
We should be questioning what can be done about these margins, not trying to protect them by eroding the protections offered to injured motorcyclists, pedestrians, cyclists and motorists.
Premiums are set by the State Insurance Regulatory Authority in liaison with insurers. Agreement is reached on likely inflation rates, superimposed inflation rates (increases in medical costs and so on) and projected claim numbers. Premiums are then set based on these assumptions.
For the past five to six years the underlying assumptions have all massively outpaced actual market performance, inflating the premiums on Greenslips. Inflation has been lower than expected, superimposed inflation has been lower than agreed and claim numbers have only recently crept up to the agreed level.
Insurance companies have been able to benefit from these inflated figures for a half decade, and now when costs have gotten out of hand are looking to shift the burden to a group of road users who simply can’t afford to bear it.
The government, the cross bench and the opposition should be questioning who is to account for the position Greenslips are in, and how premiums can be better arranged in the future to avoid a repeat of this level of premium inflation.
Let us hope the NSW Government gets it right.
Love to hear your thoughts.
Robert Bryden Lawyers Pty Ltd
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