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Rival insurers team up to challenge CTP scams

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Suncorp and RACQ Insurance have joined forces to urge the Queensland Government to tackle “rampant rorting” of the state’s compulsory third party (CTP) insurance scheme.

The insurers say there has been a surge in exaggerated and suspicious insurance claims for minor injuries such as whiplash.

They believe NSW-based lawyers are targeting Queensland following a crackdown on the issue in that state.

“Despite a steady decline in the number of car accidents, we are seeing a growth in dodgy CTP insurance claims due to people exploiting the system to get cash payouts,” RACQ Insurance CEO John Myler said.

“All motorists will eventually pay for this type of rorting through higher premiums.

“The CTP scheme represents a vital safety net, yet the alarming growth in suspicious claims has the potential to make the scheme unaffordable and unsustainable.”

Suncorp CEO Insurance Anthony Day says the Queensland scheme’s design creates incentives for abuse.

“The CTP scheme allows sizable lump sums to be paid for minor injuries from low-impact collisions, with legal representatives then able to take 50% of these payouts,” he said.

“Someone who is nudged from behind in a car park or at the traffic lights is able to claim they have a sore shoulder and walk away with tens of thousands of dollars.”

The insurers say the answer is to introduce defined benefits for low-severity claims.

“The solution is to change from a CTP scheme that pays lump-sum financial compensation to one focused on rehabilitation of injured people,” Mr Day said.

“For several years Suncorp has been advocating the introduction of defined benefits into Queensland because it’s an approach…proven to work in other Australian jurisdictions.

“Defined benefits will mean people with minor injuries get all necessary medical treatment and have their lost wages paid, but there is no longer an incentive for claimants to exaggerate their injuries so they can get a large cash payout.”

However, the Australian Lawyers Alliance has hit back, claiming insurers are driven by a desire to increase profits.

“Queenslanders should be proud of the stability, access to justice and affordability provided by our CTP scheme,” the alliance’s Queensland Director Rod Hodgson said.

“Premiums in Queensland are the second-lowest in the country and the Queensland CTP scheme provides good access to benefits for those who are injured.

“From time to time we see insurers running the argument that the sky will fall in and there is a crisis in the CTP scheme – the problem for the insurers is that is simply not true.”

Earlier this year, an independent review concluded Queensland’s CTP scheme is strong and does not require major reform.

However, the review did not explore claimant benefits, because at the time “there was no substantive evidence to support any change”.