The combination of a new National Party government and the global economic crisis appears to have quelled New Zealand’s push for compulsory third party vehicle damage cover.

Compulsory third party accident cover was a pet project of former Transport Safety Minister Harry Duynhoven following widespread public concern about uninsured motorists, including inexperienced drivers of high-performance cars.

The then-Labour Government issued a public discussion paper in June last year, which quoted estimates that uninsured motorists cost the insurance industry up to $NZ85 million ($69.8 million) a year.

But Insurance Council of NZ CEO Chris Ryan says with the new Government occupied with the global economic downturn, any discussion over compulsory third party cover has been relegated to the sidelines.

“It’s not a priority,” he told insuranceNEWS.com.au. “The Government has lots of issues to deal with concerning the economic issues of the day, so nothing has progressed.”

The proposed cover would involve only vehicle damage, as third party injury cover in NZ is already universally covered by the state-owned Accident Compensation Corporation.

Mr Ryan says he has some reservations with the proposal, noting targets of the policy such as  “boy racers” are likely to ignore a compulsory scheme.

A survey by NZ insurer AA Insurance last week found 98% of Kiwis believe all road users should carry some form of insurance.