Source: Radio New Zealand
123RF
Supporters of compulsory third-party vehicle insurance argue that it will prevent innocent drivers from facing hefty repair bills they can’t afford.
However, recent comments from the transport minister suggest that such a change wouldn’t be happening anytime soon.
Chris Bishop told interest.co.nz that the mandatory third-party vehicle insurance wasn’t considered by the government as part of changes to the driver licensing system.
He also said the gains were not necessarily as high as everyone else thought, given the huge number of New Zealanders already had vehicle insurance.
Automobile Association road safety spokesperson Dylan Thomsen said making third-party insurance compulsory was complicated.
He told Nine to Noon it needed very careful consideration as it could add extra costs to both parties.
“When you have something like this, it has the potential to push premiums up for everybody to try and get that coverage,” Thomsen said.
“The last survey that was done in New Zealand looking at this, and it was quite some time ago, we had about 92 percent of drivers having insurance.
“To try and get to 100 percent, probably impossible because even the countries that have compulsory insurance haven’t achieved that.”
Thomsen said an important consideration was the cost of enforcing third-party insurance.
Some of the European countries were getting close to around 98 percent, but there was a catch, he said.
“They have spent a lot in terms of enforcement. They have to have a lot invested in databases that can link up,” Thomsen said.
“Most of the ones that have got that high have camera networks looking at license plates quite extensively. “
Thomsen said just like car registrations or warrant of fitness, while both mandatory, you will never get to 100 percent.
He acknowledged how frustrating it could be to get compensation after a crash with an uninsured driver.
But he said the key question was whether a compulsory system would actually provide more benefits than the costs.
“We don’t think the case has been made for that yet. We would like to see more updated information because most people already have insurance,” Thomsen said.
“We know warrant of fitness, car registrations, those are both mandatory and compulsory and we know not everybody has those. So, we’re never going to be able to get to 100%.
“How much better could it be? I think more information is needed.”
Thomsen also stressed that New Zealand did have a form of compulsory insurance through ACC, which covered the costs of injuries.
He said while Australia had compulsory third-party insurance, it was only for injuries, which was the same as ACC here.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
