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).
In New South Wales, a lump sum settlement from a Compulsory Third Party (CTP) motor accident claim covers treatment costs for injured drivers, including those in Bankstown. This article explains how insurers fund medical expenses, what factors influence settlement offers, and steps to take if treatment costs are disputed. The information is based on NSW law and SIRA guidelines.
How CTP Lump Sum Settlements Cover Treatment Costs
Under the Motor Accident Injuries Act 2017, insurers must fund all reasonable treatment costs for injuries caused by a motor accident. A lump sum settlement includes a one-time payment that covers:
- All future medical treatment
- Rehabilitation costs
- Loss of income
- Pain and suffering
Insurers calculate the amount based on medical reports, treatment plans, and SIRA's Motor Accident Guidelines. For example, if you require physiotherapy or specialist care, the lump sum must cover those costs, even if they occur months or years after the accident.
Factors Insurers Consider in Funding Treatment
When determining how much to fund for treatment, insurers evaluate:
- Medical evidence: Detailed records from doctors, physiotherapists, and psychologists
- Treatment plan: Whether care is ongoing or limited to a specific timeframe
- Threshold injury rules: Only injuries meeting the 'threshold injury' definition under the Motor Accident Guidelines are funded
- Past treatment costs: Expenses already incurred before the settlement
Insurers must also account for future treatment needs. If your condition worsens or requires additional care, the lump sum must cover these costs, even if they arise after the settlement is agreed.
What to Do If Treatment Costs Are Disputed
If your insurer disputes the amount of treatment costs funded in a lump sum offer, take these steps:
- Request a detailed breakdown of the insurer's calculation
- Provide updated medical records showing ongoing treatment needs
- Seek independent medical opinion if the insurer's assessment is unclear
- Consult a solicitor if the insurer refuses to fund necessary care
Under NSW law, insurers cannot withhold funding for treatment that is reasonably necessary. If they fail to cover costs, you may need to pursue a review or dispute resolution through the NSW Civil and Administrative Tribunal (NCAT).
Time Limits and Practical Steps
You have 52 weeks from the accident date to claim treatment costs under the CTP scheme. After this period, weekly benefits stop, but lump sum settlements must still cover all treatment needs. If you're unsure whether your treatment costs are fully funded, contact your insurer in writing to confirm.
Keep records of:
- All medical appointments and treatment invoices
- Correspondence with the insurer
- Witness statements or accident reports
These documents are crucial if you need to challenge a settlement offer or seek further assistance.
When to Seek Legal Advice
Talk to a solicitor if:
- Your insurer refuses to fund necessary treatment
- You're unsure whether your injury meets the threshold injury definition
- You need help negotiating a fair lump sum offer
A lawyer can review your medical records, assess the insurer's offer, and ensure you receive full funding for all treatment costs.
Example: Funding Ongoing Physiotherapy
Consider a driver in Bankstown who sustains a soft-tissue injury requiring six months of physiotherapy. The insurer's lump sum offer must cover all physiotherapy sessions, even if they occur after the 52-week period. If the insurer disputes this, you can request a medical report confirming the need for ongoing treatment.
Next Steps
CTP lump sum settlements must fund all reasonable treatment costs for injured drivers. If you're unsure whether your settlement covers your needs, contact your insurer or seek legal advice. Every claim depends on its own facts.
Every claim depends on its own facts. To request contact about your circumstances, complete the quick, no obligation enquiry form.