Insurer underpaid hundreds of NSW accident victims in 'mind blowing' error
The error was picked up by a lawyer of a crash victim who noticed his client's payment did not add up, not by NRMA Insurance or the NSW regulator.
Hundreds of accident victims in New South Wales were underpaid by NRMA Insurance due to a massive error in calculating compulsory third party benefits since 2019. The insurer initially estimated around 700 people, but later revised the number down to 400, and has since identified an additional group of individuals owed interest on lump sum payments.
NRMA Insurance failed to notice the issue, nor did the State Insurance Regulatory Authority (SIRA), which had previously conducted an audit of the company's practices. The error was only discovered by a lawyer who noticed discrepancies in their client's weekly payments. The company acknowledged it had incorrectly applied the indexation principle for payments made more than 78 weeks after the accident, resulting in an average loss of $940 per claimant.
NRMA Insurance has since repaid the affected customers along with the owed interest and notified the regulator. This is not the first time NRMA Insurance has failed to pay the required weekly benefits; in February 2023, SIRA issued a letter of censure for underpaying over 2,000 customers, and the company repaid more than $735,000. Despite these repeated issues, NRMA Insurance has not faced significant penalties from SIRA.
Written by urgent.news from ABC News AU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
