CTP going up from 16 August.

johnboy 20 April 2016 26

The ACT Treasury has announced that Compulsory Third Party (CTP) insurance is going up 8% from 16 August 2011.

Growth in the size of payments is to blame.


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26 Responses to CTP going up from 16 August.
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Innovation Innovation 11:15 am 23 Jul 11

Qld_lurker said :

Classified said :

Jivrashia said :

When is some goddamn competition going to be introduced into the ACT’s CTP insurance market??

Probably when insurers don’t have to accept unlimited liability. The one insurer that is here gets paid for that risk.

The situation is more complex than most understand. It’s certainly not a case of insurers not wanting to sell CTP in the ACT.

CTP insurance is one of the riskiest to underwrite. Claims are usually large, and take years to settle, meaning the cost of those claims is exposed to normal inflation, and judiciary inflation (ie a judge decides to award more and sets a precedent for all other claims). As a result insurers need to keep massive amounts of money locked away in low risk, low yield securities for years (as governed by the likes of APRA), so you need to have pricing estimations pretty accurate or you lose a lot of money.

New players coming into the ACT have a combination of limited information to establish a prudent price, and an almost impossible task in predicting where claims costs will go. Given you need millions of dollars sitting in the bank before you even sell your first policy it’s a high risk, high cost venture.

Thanks to the earlier info on this post, it still puzzles me why there isn’t an added CTP premium for NSW drivers who are likely to drive/crash in the ACT eg Queanbeyan residents. I would have thought the reinsurers would have got a bit nervous about this aspect already……

screaming banshee screaming banshee 11:11 am 23 Jul 11

helium said :

Also how about enforcing the rules about having a ACT rego if you reside here. So many interstate plates in my suburb, some have been here 7+ years.

We save $600/year, thats $50/month on having on of our commercial vehicles registered to our QLD office address. If I get the chance to drive the other one up there I’ll get a roadworthy and transfer it to QLD also. If the difference weren’t so substantial it wouldn’t be worth it.

dvaey dvaey 10:01 am 23 Jul 11

OP: The ACT Treasury has announced …

That should read ‘ACT Treasury has announced that NRMA has increased their priced by 8%” to show that the price rise is due to a private firm, not the government jacking prices up again.

Qld_lurker Qld_lurker 8:12 am 23 Jul 11

Classified said :

Jivrashia said :

When is some goddamn competition going to be introduced into the ACT’s CTP insurance market??

Probably when insurers don’t have to accept unlimited liability. The one insurer that is here gets paid for that risk.

The situation is more complex than most understand. It’s certainly not a case of insurers not wanting to sell CTP in the ACT.

CTP insurance is one of the riskiest to underwrite. Claims are usually large, and take years to settle, meaning the cost of those claims is exposed to normal inflation, and judiciary inflation (ie a judge decides to award more and sets a precedent for all other claims). As a result insurers need to keep massive amounts of money locked away in low risk, low yield securities for years (as governed by the likes of APRA), so you need to have pricing estimations pretty accurate or you lose a lot of money.

New players coming into the ACT have a combination of limited information to establish a prudent price, and an almost impossible task in predicting where claims costs will go. Given you need millions of dollars sitting in the bank before you even sell your first policy it’s a high risk, high cost venture.

dtc dtc 9:55 pm 09 Jul 11

According to the MTAA green slip calculator website (which compares green slip costs across the 7 NSW CTP insurers), the CTP cost for a green slip in NSW for a 2005 model car garaged in Qbyn (or Ulladulla) driven by a 40 yr old driver with no accidents and max no claim bonus on comprehensive insurance, but 2 demerit points, ranges from $360 pa to $525 (however, the cheapest insurer is the one that I pretended to have comprehensive insurance with, so pogtentially a ‘bundle’ discount).

Without comprehensive insurance the cost is $393 – $525

For a 25 year old Qbyn driver the CTP premium is $526 – $529

So if the ACT premium is going to be around $520, then there isnt any difference for younger drivers and about $120 pa for older drivers.

2604 2604 12:59 pm 09 Jul 11

helium said :

Also how about enforcing the rules about having a ACT rego if you reside here. So many interstate plates in my suburb, some have been here 7+ years.

The more the price of CTP increases, the more people will go out of their way to avoid paying ACT rego. Behold the glory of the Laffer Curve.

Sleaz274 Sleaz274 2:09 pm 08 Jul 11

Any analyst who actually believes CPI is running at 3% or thereabouts is f***ing delusional.

Time to start locking in 5%-7% pay increases for 3 years compounded or everyone is going to end up poorer.

Gungahlin Al Gungahlin Al 1:13 pm 08 Jul 11

The Frots said :

A rise of 8%………? Dear God, when does this stop.

Perhaps when someone from Canberra runs against and boots out NRMA’s ACT/Monaro board director Alan Evans because he has just stood by and allowed NRMA to gouge us for all they can (or more likely been actively involved in it when he was chairman)??

watto23 watto23 12:28 pm 08 Jul 11

Well TPI for my car yesterday was $487.50. so i’m guessing it will be $526.50 now.

Over the last 12 months my car insurance was ~$90 more as well.

TPI for my car is not much less than my comprehensive policy. At least the bill tells me whos charging what to make up the rego fee.

Rawhide Kid Part3 Rawhide Kid Part3 11:08 am 08 Jul 11

what_the said :

johnboy said :

time_killer said :

Does anyone know how NRMA was allowed to get the CTP monopoly in the first place?

No other insurer wants to touch this market.

Seeing how Canberrans drive I cant blame them!!

Correct me if I’m wrong. If no other insurer wants to touch this market with CPT, then how come they’re jumping over each other for a bite of the Vehicle insurance.

what_the what_the 10:05 am 08 Jul 11

johnboy said :

time_killer said :

Does anyone know how NRMA was allowed to get the CTP monopoly in the first place?

No other insurer wants to touch this market.

Seeing how Canberrans drive I cant blame them!!

Jivrashia Jivrashia 9:57 am 08 Jul 11

Classified said :

You guys are getting ripped.

WE KNOW THAT. Why do you think we’re whinging? This is definitely a whinge-worthy topic for Canberrans.

helium said :

So many interstate plates in my suburb, some have been here 7+ years.

I think you can dob them in. Police might do something about it if they can get some time away from stabbers, muggers, burglars, hit-and-runners, and hoons.

johnboy said :

No other insurer wants to touch this market.

Last year, or the year before, there was talk about another player entering the market, but it didn’t come to be. It was either AAMI or Allianz.

dtc said :

should get less money than a person with

FIFY

Spideydog Spideydog 9:46 am 08 Jul 11

johnboy said :

time_killer said :

Does anyone know how NRMA was allowed to get the CTP monopoly in the first place?

No other insurer wants to touch this market.

Apparently our market is too small and as such too troublesome and financially not viable ???? So we are going to continue to get gouged ………

johnboy johnboy 9:12 am 08 Jul 11

time_killer said :

Does anyone know how NRMA was allowed to get the CTP monopoly in the first place?

No other insurer wants to touch this market.

Innovation Innovation 8:56 am 08 Jul 11

#10 dtc – Thanks for that. I should have worked that one out for myself. I wonder if, for example, NSW CTP insurers price in a risk for their vehicles in at fault accidents in the ACT? Presumably, the closer, the NSW resident is to the ACT, the higher the risk. Perhaps they should show that added premium on their Green Slips…..

time_killer time_killer 8:54 am 08 Jul 11

Does anyone know how NRMA was allowed to get the CTP monopoly in the first place?

dtc dtc 10:21 pm 07 Jul 11

Innovation said :

I’ve been giving this more thought. Does anyone know which insurance system (ie ACT or NSW) applies under various scenarios eg:

1/ ACT vehicle at fault in accident in NSW? Does this mean that the NSW Court’s can go for broke because our CTP isn’t capped?
2/ NSW vehicle at fault in accident in ACT? Does this mean that an injured ACT resident is limited by the amount of insurance that they can receive?.

The relevant law is the law where the accident occurs. So NSW insurance isnt capped per se, its that if you have a motor vehicle accident in NSW the damages the court can award is limited. So insurers of NSW motor vehicles know that the majority of accidents they cover will have limited damages. If an ACT vehicle has an accident in NSW, then the NSW laws apply; and vice versa.

Of course, whether you think it fair that someone who is injured in a motor vehicle accident, or a workplace accident (the two most common causes) should get less money then a person with the equivalent injuries arising from a different cause is dependent upon whether you think you should be entitled to save $300 per year and place the burden of injury on the injured person.

Innovation Innovation 9:53 pm 07 Jul 11

I’ve been giving this more thought. Does anyone know which insurance system (ie ACT or NSW) applies under various scenarios eg:

1/ ACT vehicle at fault in accident in NSW? Does this mean that the NSW Court’s can go for broke because our CTP isn’t capped?
2/ NSW vehicle at fault in accident in ACT? Does this mean that an injured ACT resident is limited by the amount of insurance that they can receive?

Incidentally, after reading the other RA threads running at the moment, I don’t think I’m happy that my CTP premium subsidises people with attitudes like Mr G’s……

helium helium 8:05 pm 07 Jul 11

I recall a Canberra Times story from this time last year about insurance companies gouging millions from ACT, I can’t find out what the CTP claims v’s premiums, but they do need to report to the ACT government.

We need the legislation changed so that CTP reflects the drivers of a vehicle, their experience and driving history, like it works in NSW. Then high risk drivers would pay to match their behaviour.

Also how about enforcing the rules about having a ACT rego if you reside here. So many interstate plates in my suburb, some have been here 7+ years.

Innovation Innovation 5:40 pm 07 Jul 11

I must admit that I am in two minds about CTP insurance in the ACT. On one hand, “assuming” NRMA is charging a fair price…, all of us ACT road users are making a contribution towards payouts for those the courts (hopefully correctly …..) have determined have a genuine need. Because it is a flat fee, our premium also includes a social contribution towards those ACT road users (or their more dangerous vehicles) where there is a higher degree of risk of causing accidents and third party injuries.

On the other hand, there is no competition at all, the higher premiums (compared to the States) presumably encourage more per capita drivers to not register their cars (ignoring the success or otherwise of RAPID), and there is no incentive in insurance premiums for bad drivers to modify their behaviour.

Perhaps, while we all make up our minds, it would be better if at least the CTP component on our rego papers was broken up to show how much NRMA would charge for a level of insurance (equivalent to that in NSW), how much extra we pay (or subsidy we get) because of our personal and vehicle statistics and how much extra NRMA charges because of the more generous ACT insurance.

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