Why CTP Insurers Deny Claims in NSW
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).
New South Wales insurers often deny motor accident claims by disputing the validity of injuries, the scope of benefits, or the claimant’s eligibility. Common reasons include claims for soft-tissue injuries (threshold injuries) being denied after 52 weeks, disputes over contributory fault, or failure to meet documentation requirements. SIRA’s Motor Accident Guidelines and the Motor Accident Injuries Act 2017 define the legal boundaries for such decisions.
How Insurers Assess Denied Claims
Insurers use SIRA’s framework to evaluate claims. For example, if a claimant seeks weekly income payments after 52 weeks, the insurer may argue that only threshold injuries (e.g., whiplash) are covered under the statutory benefits. Under s 4.4 of the Motor Accident Injuries Act 2017, weekly benefits stop if the claimant’s only injuries are threshold injuries. Insurers also scrutinize medical evidence to determine whether injuries meet the 'spinal nerve-root' criteria for soft-tissue claims.
Practical Steps When a Claim is Denied
- Review the Denial Letter: Insurers must provide reasons for denial, such as 'no threshold injury' or 'contributory fault'. SIRA’s 'What you can claim' page explains which benefits apply. For instance, if a claimant is denied treatment and care benefits, they may need to submit updated medical records proving ongoing care needs.
- Gather Evidence: Document all injuries, treatment, and financial impact. For example, a cyclist denied weekly payments after 52 weeks might need to show that their injury caused ongoing income loss, not just a soft-tissue injury. SIRA’s 'Making a motor accident claim' guide outlines required evidence, including medical reports and income records.
- Challenge the Decision: If the insurer’s denial is based on a misinterpretation of SIRA guidelines, claimants can request a review. For instance, if an insurer denies a claim for a 'threshold injury' but the claimant’s injury meets the spinal nerve-root criteria, they may need to provide clinical evidence to support their case.
Example: Denial of Weekly Payments
A car passenger injured in a 2023 collision was denied weekly income payments after 52 weeks. The insurer argued the claimant’s injuries were 'threshold' and did not meet the 'whole person impairment' standard. The claimant, however, submitted evidence showing their injury caused ongoing functional limitations, such as difficulty concentrating at work. SIRA’s guidelines clarify that weekly payments may still apply if the injury results in a 'whole person impairment' of 10% or more, even if it’s a soft-tissue injury.
Time Limits and Next Steps
CTP claims must be submitted within 52 weeks of the accident, but some benefits, like treatment and care, can be claimed beyond this period. If an insurer denies a claim, claimants should act promptly. For example, a 2024 case showed that claimants who appealed within 30 days of denial were more likely to secure a review. Always check SIRA’s 'Motor accident claims' page for the latest deadlines and procedures.
When to Seek Legal Advice
If an insurer denies a claim based on a technicality, such as misclassifying a soft-tissue injury, claimants may need legal assistance. SIRA’s guidelines do not cover all possible disputes, and some issues require interpretation of the Motor Accident Injuries Act 2017. For instance, a claimant denied benefits due to 'contributory fault' may need a solicitor to assess whether the insurer’s calculation of fault is legally sound.
Final Steps for Claimants
CTP claim denials in NSW often hinge on precise legal interpretations. By understanding SIRA’s guidelines, gathering robust evidence, and acting within time limits, claimants can challenge unfair decisions. If you’re unsure how to proceed, complete the quick, no obligation enquiry form to request contact about your circumstances.