TThird-party insurance for private cars in the ACT will go up $17 on July 1, a rise of 7 per cent. It is ominously above the CPI, but compared to NSW is good result. Private cars will now insure for $269, compared with NSW rates of between $370 and $400.
The difference can be put down to several factors.
NSW claims have ballooned because of aggressive lawyer advertising for small claims taken on spec. ACT lawyers do it, too, but not as aggressively. Spec cases are valuable in serious cases where injured people might have no other recourse. And some law firms shoulder the costs for a long time. This is fine provided the firm does not turn around and take unjustified extra costs.
But the trouble starts, as in NSW, when firms actively advertise and scratches-and-bruises cases are taken up on spec in the hope of easy money for “”pain and suffering”.
For example, QBE Insurance’s managing director, John Cloney, blames lawyers’ advertising and small claims in NSW for increased TPI costs and therefor higher premiums. In the ACT minor claims make up about 75 per cent of total claim costs.
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