Whether you’ve heard about it or not, the coming National Injury Insurance Scheme could be just what what the insurance and compensation industry needs to change how personal injury cover works in Australia. In Sydney’s CBD alone there are nearly100,000 people working each day, so important and beneficial changes to personal injury cover laws have never been more crucial than before.
Image sourced from Shutterstock
Suncorp has been quick to jump onto the bandwagon when it comes to declaring the importance that these reforms could offer everyday Australians. They suggest that by offering no-fault structures with defined benefits and an emphasis on rehabilitation, there’ll be an increased benefit to injured people, as well as reducing the cost volatility often associated with personal injury cover.
In the current scheme of personal injury cover, much of it is defined by at-fault systems that mean many injured people go uncompensated if there’s no one else involved. For instance, if a person were to have a car crash under the current system, if no other driver is involved or found at fault, then the injured person is deemed to be at-fault. Because the injured person is at-fault they won’t have any cover to help with the cost of treating injuries, which can be quite high when it comes to particularly violent car crashes.
It’s not only this idea of benefiting everyone that has Suncorp singing their praises for no-fault schemes. Some of the other big selling-points for no-fault systems including reducing delays that hamper rehabilitation processes as the person at-fault is determined, while also promoting choice when the responsible person’s insurer comes to deciding how to handle the claims of any and all the injured people involved. This last point is particularly relevant when it comes to encouraging Australia’s insurance industry to grow. In the example of the car crash, under a no-fault scheme each driver would be covered under their own insurer rather than relying on determining who was at fault and then the victim needing to go into discourse with an insurer that they’re unfamiliar with.
This opportunity of reform in the area of personal injury cover can also provide an excellent time to prevent schemes becoming financially unstable very quickly. The reform would see insurance schemes needing to find a balance of risk and community rating so that any cover is fair yet affordable and any uncertainty in regards to benefits and how they’ll be implemented will be reduced allowing people to recover more quickly and thoroughly. However,if insurers choose not to reform their policies in this sector it could lead to negative consequences like greatly increasing insurance premiums, less money going to injured people covered by such schemes and huge losses for insurance underwriters.
Of course there’s some hesitancy from insurance companies to reform their personal injury cover, particularly as a no-fault system would cost more than an at-fault system, but the reward of covering more people would actually result in long-term savings by reducing the amount of delays associated with claims, as well as cutting the amount of money spent when it comes to disputes as well-defined parameters are part and parcel of a no-fault system.