Insurers in New South Wales may delay decisions on Compulsory Third Party (CTP) claims due to complex legal assessments, administrative processes or incomplete information. This article explains how insurers evaluate liability under the NSW CTP scheme, the factors that may cause delays, and what claimants should do if their insurer fails to act promptly.
How Insurers Assess Liability in NSW CTP Claims
Under the Motor Accident Injuries Act 2017, insurers must determine whether a claim falls within the CTP scheme. Liability is assessed based on whether the accident involved a motor vehicle and whether the injured person meets the legal definition of a 'threshold injury' or 'injury' under the scheme. SIRA guidelines clarify that insurers must evaluate:
- Whether the accident occurred on a public road, car park or other location where CTP applies
- Whether the injured person has a 'threshold injury' (such as soft tissue damage meeting specific medical criteria)
- Whether the claimant is eligible for statutory benefits like weekly payments or treatment and care
Insurers may request additional medical evidence, accident reports or clarification on fault before making a decision. This process can take weeks, especially if the claim involves complex injuries or disputed circumstances.
Common Reasons for Delayed Decisions
Insurers may delay decisions for several reasons, including:
- Incomplete claims: Missing documentation, such as medical records or accident reports, can slow the assessment process.
- Complex injuries: Claims involving long-term injuries, neurological conditions or disputes over impairment ratings may require specialist input.
- Disputes over fault: While CTP claims typically do not require proof of fault, insurers may investigate to confirm the accident falls within the scheme.
- Administrative backlogs: High volumes of claims or internal processing delays can contribute to slower responses.
Claimants should note that insurers are not required to provide a timeline for decisions, but they must act reasonably under the law.
Steps to Take if Your Insurer Delays a Decision
If your insurer fails to respond within a reasonable timeframe, consider these steps:
- Request written confirmation: Ask the insurer to provide a written explanation of the delay, referencing the specific section of the Motor Accident Injuries Act 2017 or SIRA guidelines.
- Submit additional evidence: Provide medical records, accident reports or witness statements to support your claim.
- Escalate the matter: Contact the insurer's internal complaints department or seek assistance from the NSW Civil and Administrative Tribunal (NCAT) if the delay persists.
- Seek independent advice: A legal professional can help you understand your options, including disputing the insurer's decision or applying for a review.
Example Scenario
Consider a claimant who was in a car accident and sustained soft tissue injuries. The insurer requests additional medical evidence to confirm the injury meets the 'threshold injury' definition under the Motor Accident Guidelines. While the process is standard, the delay could exceed 60 days, prompting the claimant to escalate the matter for a timely resolution.
Time Limits and Dispute Options
While there is no strict legal deadline for insurers to decide claims, the 52-week statutory benefit rule applies to weekly payments. If your claim involves injuries that only qualify as 'threshold injuries, ' benefits may be limited after 52 weeks. Always consult the insurer's policy documents for specific timeframes.
If you believe your insurer is unreasonably delaying a decision, you may need to apply for a review through NCAT or seek legal advice. Remember, every claim depends on its own facts, and the insurer's assessment may vary based on the circumstances.
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