The Queensland insurance company RACQ has announced that it will no longer provide compulsory third party (CTP) cover to drivers, citing years of significant financial losses. This has caused shock amongst customers and the insurance industry alike.
RACQ chief executive officer, David Carter, says the reason for the discontinuation is due to 20 years of significant financial losses, despite the actions of RACQ to attempt to reduce their losses. This means that any driver in Queensland wishing to purchase CTP insurance will have to look elsewhere.
CTP insurance is an insurance policy lodged with the Motor Accident Insurance Commission (MAIC) to provide Queensland drivers and road users with some cover if they are injured in a motor vehicle accident, regardless of who was at fault. The policy pays for medical treatment and loss of wages if the injury is severe, or a lump sum in the case of death or severe disabilities.
“Assuming an equitable distribution of risk, the design of the scheme enables all taking part insurers to be profitable; however, this is not guaranteed,” Mr Carter said.
“Over the past few years, the level of risk faced by RACQ has unfortunately increased, leading to substantial losses for the club which were out of our control.”
