Compulsory third party insurance system is becoming more affordable in the ACT but it is still one of the most expensive schemes in Australia, a review has found.
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Chief Minister Andrew Barr tabled a review of the scheme in the Assembly on Tuesday.
The scheme must be independently reviewed every three years under changes introduced in 2012.
However, it comes as the Assembly prepares to debate major reforms to the scheme on Thursday that would extend benefits to not-at-fault drivers.
Scheme reviewers Finity found that since three more companies were allowed to offer CTP insurance in the ACT in 2013, premiums have fallen from $578 to $524.
However the ACT still had the second-highest premiums in Australia, behind South Australia, and the design of the scheme was partly to blame.
The ACT has a claim frequency of about three claims per 1000 vehicles, about 60 per cent higher than Queensland and 40 per cent higher than NSW.
Those states were chosen for comparison as both had a common law fault-based system until changes in NSW in late 2017.
Claims are taking an average of 2.7 years to finalise, and there are claims still being settled from 2009.
Mr Barr said this was far too long for people to be "left in limbo".
"If they are not able to meet these costs privately, some people may simply go without necessary treatment and care, exacerbating their injuries and preventing a proper recovery," Mr Barr said.
Nearly half (46.5 per cent) of finalised claims were for under $50,000, with an average size of $16,000.
Only 0.9 per cent of finalised claims were for more than $1 million, with an average size of $1.39 million.
More than half (55.4 per cent) of claims lodged were for whiplash or soft tissue injuries. The average finalised claim size was $80,000.
Only five claims for spinal injuries have been finalised, with an average payout of $2.3 million.
About 24 per cent of payouts in the ACT went to legal costs, compared to 18 per cent in Queensland and 19 per cent in NSW.
By comparison, 22 per cent went to treatment and care, compared to 19 per cent in Queensland and 25 per cent in NSW.
Mr Barr said the fact that more money went to legal costs than care showed the system was not working in the best interests of Canberrans.
Legal representation is increasing for smaller claims, and has also risen in recent years.
Seventy-five per cent of claimants had legal representation, lower than the rate in Queensland where 78 per cent had a lawyer.
The reforms have been criticised as handing too much power to insurers and concerns about insurer super profits.
Mr Barr said as a privately underwritten scheme it was "fair enough" that insurers make some profit but it should be "in line with the community's expectations".
Insurer profits are falling under the ACT's current CTP scheme according to Finity estimates, with profit margins eroding from around 17 per cent in 2016 to just under 10 per cent in 2018.
"This is significantly lower than the estimated profit margins in some other jurisdictions, such as Queensland," Mr Barr said.
The new Motor Accident Injuries commission will also have greater powers to collect information on insurer profits to help it decide whether proposed premiums are acceptable, he said.
