Delayed insurer decisions, time limits under NSW law
A threshold injury under the Motor Accident Injuries Act 2017 (NSW) includes a soft tissue injury and a psychological or psychiatric injury that is not a recognised psychiatric illness (adjustment disorder and acute stress disorder are the usual examples; s 1.6 and Motor Accident Guidelines Part 5).
If an insurer in Western Sydney delays making a decision on your Compulsory Third Party (CTP) claim, you have rights under NSW law. The Motor Accident Injuries Act 2017 and SIRA guidelines set out how long an insurer has to act and what you can do if they fail to meet those timelines. While there is no fixed statutory deadline for every decision, insurers must act within a reasonable time. Delays beyond what is reasonable may entitle you to claim for the consequences of that delay, including financial loss and stress.
Legal framework for insurer decision timelines
Under the Motor Accident Injuries Act 2017, insurers must process claims promptly and fairly. There is no specific time limit in the Act for every decision, such as whether to accept liability, approve treatment, or assess impairment, but the law requires decisions to be made within a reasonable timeframe. What is reasonable depends on the circumstances, including the nature of the injury, the complexity of the claim, and the evidence provided.
SIRA’s guidance states that insurers must not unreasonably delay decisions. If a decision is delayed without a valid reason, it may be considered a breach of the insurer’s duty under the Act. This is particularly relevant in Western Sydney, where claimants may face longer processing times due to volume or administrative backlogs. The onus is on the claimant to demonstrate that the delay was unreasonable and caused harm.
Practical steps if your insurer is delayed
If your insurer in Western Sydney has not made a decision within a timeframe that seems reasonable, take the following steps:
- Notify the insurer in writing that you expect a decision within 14 days, citing SIRA’s expectation of timely processing.
- Keep a record of all correspondence, including emails, letters, and call logs.
- Gather and preserve evidence such as medical reports, accident scene photos, witness statements, and proof of lost income.
- Request a written explanation for the delay, and keep a copy.
SIRA advises that if an insurer fails to respond within a reasonable time, you may be entitled to apply to the NSW Civil and Administrative Tribunal (NCAT) for a determination on the delay. This is not a claim for damages, but a way to compel the insurer to act.
What happens if an insurer delays beyond a reasonable time
An unreasonable delay may result in financial or personal harm. For example, if a delay prevents you from receiving weekly income payments or treatment and care benefits, you may suffer additional loss. In such cases, you may be able to claim for the consequences of the delay, including:
- Additional medical costs incurred due to delayed treatment
- Loss of income during the delay period
- Increased stress or mental health impact
If the delay is found to be unreasonable, you may seek compensation for these losses through a common law damages claim, provided you meet the threshold injury requirements and the claim is not barred by time limits.
Time limits and dispute resolution
There is no automatic 12-month or 24-month deadline for every insurer decision. However, the statute of limitations for making a claim for damages under the Motor Accident Injuries Act 2017 is generally 3 years from the date of the accident. This is a critical time limit: if you do not start legal proceedings within 3 years, you may lose your right to claim damages.
If you believe your insurer’s delay has caused harm, you must act quickly. The earlier you raise the issue, the better your chance of obtaining a remedy. You may also request a review of the insurer’s decision through SIRA’s dispute resolution process. This is not a court process, but it can help resolve issues without legal action.
When to seek legal advice
A delayed decision does not automatically mean you have a claim. However, if the delay has caused financial loss, worsened your injury, or prevented you from receiving benefits you are entitled to, you should seek advice. Legal advice is particularly important if:
- The insurer has not responded to written requests
- You have been denied treatment or income payments without explanation
- You have suffered a deterioration in health due to delayed care
SIRA does not provide legal representation. You may need to consult a solicitor to assess whether the delay was unreasonable and whether you have a basis for a claim.
Hypothetical example
A pedestrian in Liverpool, Western Sydney, was struck by a car in May 2024. They reported the accident to the insurer within a week and provided medical evidence of a back injury. The insurer did not respond to initial inquiries for 10 months. During that time, the claimant was unable to access treatment and lost 12 weeks of work. After 10 months, the insurer finally accepted liability but denied the claim for weekly payments on the grounds of a pre-existing condition. The claimant sought legal advice and successfully argued that the 10-month delay was unreasonable and had caused financial and physical harm. The claim was later settled for damages related to the delay.
Next steps
Every claim depends on its own facts. To request contact about your circumstances, complete the quick, no obligation enquiry form.