At-Fault Driver Cover Update – Issues Continue

In our News article of 1 April and in our analysis of at-fault driver cover, we identified issues with the payment of at fault driver cover benefits for accidents occurring after 1 April 2010.

As at 15 October 2010, those issues remain for some insurers.

This site was the first to identify and articulate the issues.

The facts

Here are the facts.

Prior to 1 April 2010, the driver at fault in an accident was not covered under the CTP greenslip scheme unless the driver was catastrophically injured.

1. Five of the seven greenslip insurers offer an additional feature with greenslips, generally referred to as at fault driver cover.
2. At fault driver cover means that insurers pay the at fault driver specified benefits for specified injuries which that driver may sustain in an accident.  Benefits vary, but are typically around $50.000.00.
3. Each insurer provides a policy document setting out the terms on which at fault driver cover benefits will be paid.
4. Effective from 1 April 2010, the State Government amended the Motor Accidents Compensation Act 1999 so that injured at fault drivers became entitled to compensation up to a maximum of $5,000.00. The legislation to amend the scheme was introduced in May 2009.
5. As at 1 April 2010 the insurer’s policy documents stated that no at fault driver cover benefits were payable if the injured at fault driver also received or was entitled to receive compensation under the Act.
6. Therefore, on the basis of policy wording, no at fault driver cover benefits were payable from 1 April 2010, yet insurers continued to market the benefits of those policies.

Current situation

As at 15 October 2010:

1. NRMA and QBE have updated policy terms so that at fault driver cover benefits are payable.

2. GIO has stated publicly and on its website that it does not intend to apply the terms of the policy document so as to exclude at fault drivers from accessing benefits and that policy terms will be amended to ensure this is clear.

3. On the basis of the Allianz policy document, benefits are not payable because the injured at fault driver is entitled to the compensation under the Act.

4. On the basis of the Zurich policy document, benefits will not be paid if the injured at fault driver receives compensation under the Act.

We will continue to monitor the position and will update this site as necessary.