Motorists in NSW can expect lower premiums and improved all-round coverage when the state moves to a hybrid no-fault compulsory third party (CTP) scheme, insurers say.

The change may take place in July next year, pending parliamentary approval.

Insurance Council of Australia CEO Rob Whelan says it will prevent about 7000 injured road users a year from missing out on financial support, and will reduce delays and expenses in determining claims.

“Though key details are still to be determined, introducing defined benefits for most claimants would provide greater certainty for injured road users and insurers, speed up claims processing and reduce administration, legal and medical costs,” he said.

He says it represents “a significant step towards making the CTP scheme fairer, more sustainable and more affordable for NSW road users”.

However, lawyers have criticised the move as politically motivated, claiming it will penalise injured motorists and their families.

“We know the real aim of the changes is to deliver CTP premium reductions to marginal seats in NSW ahead of the next state election – but this can only be achieved at a huge social cost to the community,” Law Society of NSW President Gary Ulman said.

“Under the Government’s new scheme, injured motorists… will face a lifetime of pain and financial uncertainty.”

The State Government says about 60% of total premium will go to injured people under the hybrid, no-fault, defined benefits scheme, compared with just 45% currently.

About 70% of claims cost will go to seriously injured claimants, compared with less than 50% now.

Better Regulation Minister Victor Dominello says the current greenslip scheme – a common-law, fault-based program in operation since 1999 – is unsustainable and premiums will rise under the status quo.

“A surge in low-severity claims, for injuries such as whiplash and soft tissue damage, is putting significant pressure on greenslip premiums,” he said.

“As a result of reduced scheme costs, we will see a much higher proportion of the premium dollar going to injured road users.

“The majority of NSW motorists can also expect to see a substantial reduction in their greenslip premiums.”

IAG and Suncorp have applauded the move, which they say will benefit NSW motorists and reduce fraudulent claims.

“The culture of lump-sum compensation will be transformed to a focus on rehabilitation and supporting people to recover from their injuries as quickly as possible,” Suncorp EGM Personal Injury Portfolio and Products Chris McHugh said.

“This will reduce fraudulent CTP claims that have been costing NSW motorists dearly.”

IAG CEO Australian Consumer Division Anthony Justice says the new scheme “puts people first and is designed to focus on prevention and recovery, rather than compensation”.