People injured in road crashes are waiting more than two years to have their Compulsory Third Party claims assessed and settled, according to the Motor Accident Insurance Commission, the regulator that oversees Queensland’s CTP insurers.
These claims range from minor whiplash to the most catastrophic cases involving permanent brain or spinal injury.
The performance of the CTP Scheme impacts a substantial number of Queenslanders, with more than 7500 CTP claims lodged in Queensland each year.
Leading compensation lawyer and managing partner at Travis Schultz & Partners, Travis Schultz, said while it was true that Queensland had the best CTP Scheme of any state, in recent years, straight-forward claims had taken longer to finalise than ever before.
“Even modest claims, such as those involving whiplash, can take more than two years to finalise, despite liability being admitted,” Mr Schultz said.
“CTP insurers in Queensland tread an uneasy path to deliver an efficient insurance scheme that meets claimants’ needs, while ensuring profitability and long-term scheme viability.”
One claimant with Suncorp CTP insurance was injured in an accident in August, 2018, when he was riding his bike on the Gold Coast and hit by a car due to no fault of his own.
“In theory, one shouldn’t be out of pocket by much because rehabilitation costs are supposedly covered by the insurer as you go, however in reality, you do end up out of pocket having to pay gaps in specialist fees and the costs of extended periods of rehabilitation outside what the insurer considers is an acceptable timeframe for recovery,” he said.
“It appeared to me that my insurer did not make a genuine attempt to resolve my claim at the time of my settlement conference and it seemed as though they deliberately dragged out the process. It left me with no choice but to litigate and this was the last thing I wanted to have to do because I didn’t need any added stress in my life.
“Not only have I been suffering with physical injuries from my accident, but also with the psychological fall-out. Having to endure a long and drawn-out claim settlement period has only added to my condition. It’s extremely consuming and frustrating to have to deal with the insurer and their representative and it feels like they have treated me as a guilty party.
“Times for us have been so tough since my accident, I’ve contemplated suicide. As a self-employed business owner, I have had to sell my business and will be working on a substantially reduced income. My wife who works for me is in the process of obtaining another job, once again, at a substantially reduced income.”
Mr Schultz, who has 30 years in the compensation law space, said in recent times insurers were more likely to deliberately drag out settlements in the hope that the claimant would settle for less.
“We are now seeing a situation where less than 5% of claims are settling at or around the time of their settlement conference which means 95% of claimants are forced to litigate, which is ultimately the last resort for people,” Mr Schultz said.
“One of the objects of the Motor Accident Insurance Act 1994, which governs the Queensland Scheme, is to encourage the speedy resolution of personal injury claims which result from motor vehicle accidents. In recent years however, it seems as though CTP insurers are conducting themselves in a manner which is contrary to the letter and spirit of the legislation.”
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MAIC oversees Queensland’s CTP insurers, and this year introduced its first Claims Management Standards, including a minimum benchmark for how the insurers are expected to manage CTP claims.
The standards themselves include guiding principles such as promoting best practice claims management, the efficient and fair treatment of claimants, and effective communication.
Although it is only one measure of performance, Mr Schultz said claims duration was arguably one of the most important KPIs for his clients, particularly as the legislation encouraged the ‘speedy resolution’ of personal injury claims.
“It’s heartening to see these standards implemented, particularly as the legislation promotes and encourages the rehabilitation of claimants who sustain injuries in motor vehicle accidents,” Mr Schultz said.
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Assessing the latest MAIC CTP Scheme Insights report data, Suncorp is the worst-performing CTP Insurer (closely followed by Allianz), with RACQ leading the way with the fastest claims resolutions, finishing 7.8 months faster than market dominator AAI Insurance.
Trend in performance for insurer’s claims
CTP Insurer: Quarter 1 (2020), 2 (2020), 3 (2020), 4 (2020), 1 (2021).
Suncorp: 23.6 months, 24.6 months, 25.6 months, 25.7 months, 26.2 months
Allianz: 21.5 months, 21.5 months, 22.6 months, 23.5 months, 23.4 months
RACQ: 18.3 months, 18.5 months, 18.5 months, 18.4 months, 18.4 months
QBE: 19.2 months, 18.9 months, 19.3 months, 19.3 months, 19.8 months
Source: MAIC Quarterly Insights Reports
According to Mr Schultz, a basic analysis of this data would suggest:
- RACQ is reasonably stable in its claims management duration and are leading the way.
- QBE is also relatively stable, but have had a slight increase in claims duration in the last quarter.
- Allianz have been relatively stable too. The provider is quite slow, but has shown slight improvement in the last quarter.
- Meanwhile, Suncorp has seen an alarming increase in claims duration of 2.6 months in the period from Q1 2020 to Q1 2021.
Kylie Horton, Executive Manager of Queensland CTP Claims at Suncorp Personal Injury Insurance, said its strategic goal during the next two years is to deliver for their customers best in class claims management, which includes settling genuine claims as quickly as possible.
Mr Schultz reiterated that while there are imperfections and inconsistencies among insurers and the litigation process, the Queensland CTP Scheme is undoubtedly the best in the country.
“It is well run, well managed and profitable for insurers, but justice delayed can be justice denied and there is certainly room for improvement for claim durations,” Mr Schultz said.
For more information visit www.schultzlaw.com.au
