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A new scheme designed to make compulsory third-party insurance fairer and more affordable for NSW motorists and road users has been tagged as a “complete disaster” in curbing the “aggressive” and “adversarial” approach used by some insurers to deny payments to motor accident victims.
That was the view expressed by the Australian Lawyers Alliance (ALA) in a submission to a parliamentary inquiry into changes, which came into effect last December, which it alleges included letters written by insurers containing “false” information or making “legally incorrect” decisions to deny claims.
The alliance wrote that “some CTP insurers appear to have little recognition that they now bear any obligation to treat claimants in a fair, frank, and honest fashion,” The Sydney Morning Herald reported.
It comes as an SMH investigation revealed concerns that the new system is reducing the scope of payouts to the most seriously injured, cutting claimants off from benefits before they are fully recovered, and allowing insurers to adjudicate their own disputes.
In one case, it took a 28-year-old motor accident victim “months and months” before he was given the nod by Suncorp-owned GIO to undergo surgery for the serious physical injuries he suffered from a motorcycle accident.
Truck driver Deniz Cimen suffered spinal damage, a slipped disc, and shoulder and knee injuries after he was struck by a car while on his motorcycle. The accident occurred on Wisemans Ferry Road last December. But another blow came when the insurer denied his claim, saying his psychological injuries were only minor, SMH reported.
Cimen appealed and the matter went to an internal review, conducted by the insurer. He was then “interrogated” by an internal review officer over the phone with “all sorts of weird questions.”
The contents of the phone conversation were used to uphold the GIO’s decision and overrule the medical diagnosis of Cimen’s treating psychologist – a decision that would have been retained if not for the intervention of Philip Scroope, of Gajic Lawyers.
“Mr Cimen is a truck driver by trade and a second-generation Australian with no experience with the legal process whatsoever,” Scroope told SMH. “The insurance company has made a crazy decision that would have kept him out of his claim, had it not been challenged.”
A spokesperson for State Insurance Regulatory Authority (SIRA) defended the new internal review process as best practice, “designed to allow injured people to challenge the insurer’s decision quickly and simply.”
But Andrew Stone, ALA NSW president, said it was “complete waste of time” to ask an insurer to “change its mind”. He also said insurers had “different levels of combativeness” and that there were areas in which they were “trying it on.”
“It has certainly been the experience of those representing the injured that, over the past few years, insurers are making excessive allegations of contributory negligence,” Stone told the publication.
Stone urged SIRA to publish data comparing insurer’s performance in areas such as complaints, to help the public make informed choices when buying green slips.
