Allianz Australia has lost its bid to overturn a psychological injury claim, with the New South Wales Court of Appeal siding with a policyholder over a motorcycle theft incident.
Let’s break down what happened and why it matters for the insurance industry.
Back in July 2018, John Bell’s day took a sharp turn when someone tried to steal his Harley-Davidson in broad daylight. As Bell ran to stop the thief, the motorcycle was pushed onto him, leaving him with a leg injury. But the fallout didn’t stop there. Bell said the incident left him with post-traumatic stress disorder and major depressive disorder, and he turned to Allianz, the compulsory third party (CTP) insurer, for compensation under New South Wales’ Motor Accident Injuries Act.
Allianz didn’t see it the same way. The insurer argued that Bell’s psychological injuries weren’t caused by the accident itself, but by the theft and the fear that followed. In Allianz’s view, those weren’t covered by the Act. The disagreement wasn’t just about the facts, but about what counts as a “motor accident” under the law - and, by extension, what insurers are really on the hook for when trauma goes beyond broken bones.
Bell’s claim was first knocked back by a medical assessor, who said his psychological injuries weren’t related to the accident. Bell pushed back, and after a series of reviews and a trip through the Personal Injury Commission, a Review Panel found that Bell’s psychological injuries did, in fact, stem from the motor accident. They set his whole person impairment at 19%, clearing the way for him to receive statutory benefits and damages for non-economic loss.
Allianz wasn’t ready to let it go. The insurer challenged the Review Panel’s decision in the Supreme Court, arguing that the panel had made mistakes and hadn’t been fair in its process. When the Supreme Court rejected those arguments, Allianz took the fight to the Court of Appeal.
On August 15, 2025, the Court of Appeal handed down its decision: appeal dismissed. The judges agreed that the Review Panel had done its job properly. The panel didn’t need to split hairs over whether the psychological injuries came from the theft or the accident - they looked at the whole event as a single cause. The court also found that the panel had treated both sides fairly and followed the rules set out in the Motor Accident Injuries Act.
For insurers and claims professionals, the message is clear: when it comes to psychological injuries in motor accident claims, the courts are willing to look at the bigger picture. If the trauma is tied to the incident as a whole, it can be covered - even if the event includes criminal acts like theft. The decision didn’t hinge on any particular insurance policy clause, but on the statutory framework that governs CTP insurance in New South Wales.
This case is a reminder that psychological injuries are very much on the radar, and that the processes for assessing them need to be robust, transparent, and fair. It also underscores the importance of understanding how statutory definitions and guidelines shape the boundaries of insurer liability.
With the Court of Appeal’s decision now final, insurers operating in New South Wales have a fresh precedent to consider when handling similar claims. The outcome reinforces that, in the eyes of the law, the fallout from a traumatic event can be just as real - and compensable - as a physical injury. For the insurance industry, it’s a call to keep pace with the evolving landscape of injury claims, and to make sure that processes are up to scratch when the next complex case rolls in.
