Compulsory Third Party Insurance mulled

The Government is considering introduction of compulsory Third Party vehicle insurance to foster better road safety.

Transport Minister Steven Joyce announced on January 7 that the move would be a part of the ‘Safer Journeys Road Safety Strategy.’

The Ministry survey found that 92.4% of New Zealanders had their vehicles insured and that 7.6% of vehicle owners either had an uninsured vehicle or were not aware if their vehicle was insured.

The Survey was conducted last year with 4000 respondents.

It said New Zealand’s level of uninsured vehicles was not out of step with other countries which have compulsory vehicle insurance law.

“The problem associated with uninsured vehicles is the discrepancy as to who should meet the costs related to damages when the at-fault motorist is uninsured, especially when they cannot or will not bear the costs themselves.

“This is an issue of equity, rather than road safety,” the report said.

The Survey said that vehicle insurance is compulsory in the UK and the US. But according to estimates, respectively 6% and 13.8% of motorists in these countries were not insured.

Mr Joyce said the low level of uninsured vehicles in New Zealand did not mean that the Government would not consider making Third Party vehicle insurance cover compulsory.

“But it does mean that the proposal may not deliver the benefits that might have been expected, because New Zealanders already have a high level of insurance,” he said.

As the survey pointed out, disputes often arise when uninsured vehicles are involved in traffic accidents. Owners and drivers of other vehicles that are not at fault are victimised since they are unable to lodge their insurance claims.

Mr Joyce indicated that the Government may consider a ‘mix’ of insurance covers with least additional cost to motorists.

He said compulsory vehicle insurance schemes in some countries cover the cost of injury, whereas the cost is covered by ACC levies in New Zealand.

“Vehicle insurance premium is not likely to be high deterring young drivers owning vehicles to insure them,” he said.

Mr Joyce said his Ministry would shortly release the Government’s strategy for the next ten years.

The Survey said there was no information available regarding the crash risk of drivers of uninsured vehicles.

“We must obtain such information and evaluate before developing levels of motor insurance coverage,” it said.