Understanding Insurer Internal Reviews in NSW CTP Claims
When a claim for motor accident compensation is denied or limited by a Compulsory Third Party (CTP) insurer in New South Wales, the claimant has the right to request an internal review. This is a formal process within the insurer’s own procedures to reconsider the decision. However, insurers often make errors during this stage that can delay or reduce the compensation a claimant receives. These mistakes are not always obvious to someone without legal experience, but they can significantly affect the outcome of a claim.
The Motor Accident Injuries Act 2017 (MAIA) and the Motor Accident Injuries Regulation 2017 set out the legal framework for CTP claims in NSW. Under this scheme, claimants can seek treatment and care benefits, weekly income payments, and damages for pain and suffering, depending on the nature and severity of injuries. Insurers must follow these laws when assessing claims, including the requirement to provide reasons for decisions and to consider new evidence.
Common Errors Insurers Make During Internal Reviews
Insurers frequently make the following errors during internal reviews, which claimants should be aware of to protect their rights:
- Failing to properly consider new medical evidence submitted by the claimant, particularly reports from treating medical practitioners that support the extent of injury or ongoing impairment.
- Incorrectly applying the threshold injury provisions under MAIA, especially where a claimant has a spinal nerve-root injury with neurological signs other than radiculopathy, which may still qualify as a threshold injury under the Motor Accident Guidelines.
- Not reviewing the full record of treatment and care, including all medical reports, therapy notes, and records of time off work, which may demonstrate the ongoing impact of injuries.
- Misapplying the 52-week limit on statutory benefits where only threshold injuries are sustained. This limit only applies to weekly payments and treatment and care benefits, not to damages for pain and suffering, and does not prevent a claim for damages if the threshold is met.
- Failing to provide a written response within the timeframe required by SIRA’s guidance, which may allow a claimant to proceed directly to the Personal Injury Commission (PIC) or SIRA.
These errors can result in a claim being wrongly denied, underpaid, or delayed. Because the insurer is responsible for its own internal review, it is essential that claimants understand how to identify and challenge these mistakes.
How Mistakes Affect Claim Outcomes
When an insurer makes an error during an internal review, it may lead to a decision that does not reflect the full medical evidence or the legal requirements under MAIA. For example, if a claimant has a soft tissue injury with ongoing neurological symptoms that are not classified as radiculopathy, but which affect function, the insurer may incorrectly argue that the injury does not meet the threshold for damages. This could result in the claimant being denied damages even though they have a qualifying injury.
Similarly, if an insurer fails to review a new MRI report that shows a disc bulge contributing to ongoing pain, and does not update its assessment accordingly, the claimant may not receive appropriate treatment and care benefits. These errors can have lasting consequences, including financial hardship and prolonged recovery.
Practical Steps to Challenge Insurer Errors
If a claimant believes an insurer has made a mistake during an internal review, they should take the following steps:
- Carefully review the insurer’s written response to the internal review request. Look for whether the insurer has addressed all new evidence, applied the correct legal tests, and provided a clear explanation for the decision.
- Gather and preserve all evidence that supports the claim, including medical records, letters from treating practitioners, photographs of the accident scene, witness statements, and correspondence with the insurer.
- If the insurer’s decision is not satisfactory, the claimant can request a review by the Personal Injury Commission (PIC). The PIC has jurisdiction to hear disputes about CTP claims, including internal review decisions, and can order a new assessment.
- Under SIRA’s guidelines, a claimant may also apply to SIRA directly if they believe the insurer has not followed the correct process or has failed to act within a reasonable time.
The PIC or SIRA will assess the claim based on the evidence and the law, not on the claimant’s desire for a different result. However, a properly documented challenge increases the chances of a fair review.
Time Limits and When to Seek Advice
There are time limits that apply to CTP claims in NSW. For example, a claim for damages must generally be made within three years of the accident date. However, the process of requesting an internal review and then escalating to the PIC or SIRA must be initiated within a reasonable timeframe, which is not fixed but depends on the circumstances.
If a claimant is unsure whether an insurer has made an error, or how to proceed, they should seek independent legal advice. The Motor Accident Injuries Act 2017 and SIRA’s guidelines are complex, and a mistake in procedure or interpretation can have a lasting impact on the claim.
A Realistic Example
A 42-year-old driver was involved in a rear-end collision in a car park in Sydney in September 2024. The insurer initially denied weekly income payments on the grounds that the claimant’s neck pain was not severe enough to qualify as a threshold injury. The claimant submitted a new MRI report showing a cervical disc bulge with nerve root compression, and a treating neurologist’s report confirming ongoing neurological signs. The insurer conducted an internal review but failed to consider the new MRI and neurologist’s report, and maintained the original decision. The claimant challenged this by requesting a review by the PIC, which subsequently ordered a new assessment. The PIC found that the injury met the threshold for damages, and the claimant was awarded compensation.
This example illustrates how an insurer’s failure to properly review new medical evidence can result in a claim being wrongly denied, and how a formal challenge can lead to a different outcome.
Next Steps
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