Where interstate CTP policies do not respond, the NSW Nominal Defendant will pay statutory benefits

  • 24 Aug 2021

Each State has a different CTP Scheme, few covering the at fault driver. In NSW, the Nominal Defendant will pay statutory benefits in those circumstances.

Key Points:

  • Every injured person is entitled to statutory benefits, even if the at-fault vehicle is insured interstate.
  • The interstate insurer may elect to enter an agreement with a New South Wales CTP insurer or opt to have the Nominal Defendant manage the claim.
  • The Nominal Defendant will recover payments made from the interstate insurer if the interstate policy covers the risk.

The Motor Accidents and Workers Compensation Legislation Amendment Bill 2021 (Bill) was introduced into the Legislative Assembly on 9 June 2021 by the Hon. Victor Dominello, Minister for Customer Service.

The Bill’s objectives include improving access to compensation entitlements for people injured in motor vehicle accidents and their dependants. It also improves customer service, scheme efficiency, fairness, and equity.

The proposed amendments to section 3.2 subsections (6) and (7) address interstate vehicles, specifically where the at-fault vehicle is insured interstate.

Motor vehicle compensation differs from state to state. NSW has a more generous scheme that supports at-fault drivers, in the form of statutory benefits, for 6 months post-accident. Often, the interstate policy does not cover at-fault drivers.

The proposed amendments make it clear where the interstate insurer's policy does not cover the at‑fault driver, the Nominal Defendant will bear the cost of paying the statutory benefits to that at‑fault driver.

The interstate insurer is given the option to enter into an agreement with a NSW licensed insurer (with written approval from PIC) or opt for the Nominal Defendant to manage the claim on their behalf.

Where the Nominal Defendant manages the claim, the Bill allows New South Wales CTP insurers to recover all reasonable costs from interstate insurers relating to its handling, unless the interstate insurer does not provide insurance cover for the at‑fault driver.

The proposed amendments give protection to all persons injured in motor accidents occurring in NSW, even when they are not covered by interstate insurance (subject to some exclusions).

Post by Hicksons Special Counsel, Laura D'Alessandri, and Solicitor, Sandra Aziz.

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