Insurance affected by ‘bombs’ on Australian roads
The financial strain on Australians is extending to the roads, where “death traps” are risking people’s lives and the theft of older cars is on the rise.
A recent police operation in Queensland found an alarming amount of unroadworthy or unregistered cars, with many needing extensive repairs. A senior police officer told local media insurance premiums would “blow out” if these vehicles were involved in accidents.
The theft of older cars is on the rise again as the economic downturn bites. Now they’re being stolen for spare parts rather than their scrap value. Geoff Hughes, Director of Strategy and Programming at the National Motor Vehicle Theft Reduction Council, told insuranceNEWS.com.au people are again finding they can’t afford car parts.
He says a recent boom in cars being stolen for their scrap metal value will ease in the coming months as the price of scrap metal plummets – another side-effect of the financial crisis – from $300 a tonne in the middle of the year to about $10 a tonne now.
Mr Hughes says the stripping of older vehicles is “a major vulnerability” in the system at the moment, with the illicit car parts market worth as much as $300 million a year.
“Whereas we have enjoyed good economic conditions of late, as the economy moves to a recession we predict crime will increase,” he said. “People may owe more money than a car is worth on the market and may be tempted to arrange a crime.”
An NRMA spokesman told insuranceNEWS.com.au the insurer may refuse or reduce a claim or cancel a person’s policy if their vehicle is not in roadworthy condition.
A recent police operation in Queensland found an alarming amount of unroadworthy or unregistered cars, with many needing extensive repairs. A senior police officer told local media insurance premiums would “blow out” if these vehicles were involved in accidents.
The theft of older cars is on the rise again as the economic downturn bites. Now they’re being stolen for spare parts rather than their scrap value. Geoff Hughes, Director of Strategy and Programming at the National Motor Vehicle Theft Reduction Council, told insuranceNEWS.com.au people are again finding they can’t afford car parts.
He says a recent boom in cars being stolen for their scrap metal value will ease in the coming months as the price of scrap metal plummets – another side-effect of the financial crisis – from $300 a tonne in the middle of the year to about $10 a tonne now.
Mr Hughes says the stripping of older vehicles is “a major vulnerability” in the system at the moment, with the illicit car parts market worth as much as $300 million a year.
“Whereas we have enjoyed good economic conditions of late, as the economy moves to a recession we predict crime will increase,” he said. “People may owe more money than a car is worth on the market and may be tempted to arrange a crime.”
An NRMA spokesman told insuranceNEWS.com.au the insurer may refuse or reduce a claim or cancel a person’s policy if their vehicle is not in roadworthy condition.