Drivers lose out in insurance shake-up

18th Jul 2019

The SA State Government’s recent rejection of a number of recommendations made by a parliamentary review into SA’s compulsory third party (CTP) scheme is bad news for injured motorists.

Since the changes to the CTP scheme were first intimated in 2012, the Law Society has actively campaigned against them. The scheme as it now stands, following the changes that came into effect in July 2013, is very harsh.

If you are injured in SA there are three different means of assessing those injuries. There is the straight common law scheme, there is the CTP scheme, which relates to motor accident injuries, and there is the workers’ compensation scheme.

How you suffered your injury will determine whether or not you will receive any compensation, in particular for pain and suffering. The government suggests that we need a threshold for CTP claims to ensure those with minor injuries do not exploit the system.

Under SA’s current scheme, a person injured in a car accident with an 8% whole person impairment to their back would not receive any damages for non-economic loss (pain and suffering), whereas that same person would receive $18,416 under the State’s workers’ compensation scheme.

If the injury occurred in Queensland (where the Injury Scale Values were designed) the injured person would receive $21,200. How can the SA Government continue to support this scheme? Injured motorists in SA should be adequately compensated for the injuries they have sustained. Our insurance premiums may be cheaper than the old scheme, but the product is far inferior.

The Injury Scale Value thresholds limit the ability of the injured person to qualify for compensation for both economic loss and pain and suffering. The scheme should provide appropriate compensation for pain and suffering and the arbitrary 20% reduction in compensation for past and future economic loss should be abolished.

As a personal injury lawyer I have seen these changes adversely affect South Australian families, to the point of financial ruin. To reduce someone’s ability to recover actual lost income to 80% of the net loss is completely unjustified. How would you survive if your income was reduced by 20% through no fault of your own? How could you reconcile the fact that despite suffering a permanent back injury in a car accident that wasn’t your fault you’d receive no compensation for pain and suffering, yet a person who was at fault but injured in similar circumstances at work could receive a lump sum of at least $18,416 under the SA workers’ compensation scheme (which is hardly generous)? Why are South Australians so disadvantaged? 

The Committee made recommendations to make the CTP scheme fairer. Those recommendations should be adopted, otherwise the only people winning out of this review are the insurers, and they are already making enough money from South Australians.

This is an edited version of an article originally published by The Advertiser. It has been republished with the author’s permission. 

Amy Nikolovski practices in the areas of personal injury, workers compensation and general litigation. She is an active member of the Law Society of South Australia and is currently President, being an elected member since 2012. Amy has been recognised numerous times as a leading lawyer in her field in both South Australia and Nationally by Doyle’s Guide to Lawyers.


The views and opinions expressed in these articles are the authors' and do not necessarily represent the views and opinions of the Australian Lawyers Alliance (ALA).

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Tags: South Australia CTP Personal Injury Insurance Motor accident Government Amy Nikolovski