NZ proposes compulsory third party motor cover
The NZ Government is a step closer to introducing compulsory third party property motor insurance to combat damage caused by uninsured drivers.
Transport Safety Minister Harry Duynhoven has released a discussion paper that estimates about a quarter of NZ drivers are uninsured at an annual cost of up to $NZ85 million ($68 million).
Proposed measures could “be a major incentive in getting people to take greater responsibility for their driving behaviour,” he said.
The policy would only cover property damage, as NZ’s Accident Compensation Corporation already covers drivers for personal injury.
The paper suggests private insurers could provide compulsory cover at market rates, with high premiums for risky drivers to encourage safer habits.
But Insurance Council of New Zealand (ICNZ) CEO Chris Ryan says many high-risk drivers are likely to ignore any legislation.
He told insuranceNEWS.com.au the country has been toying with compulsory cover for 20 years.
“Some insurance companies are happy about the idea, others less so,” Mr Ryan said. “The questions are around the premium levels, and policing costs. This is a discussion paper and there’s some way to go.”
Submissions to the document close on August 8. A general election is expected in NZ by December and is likely to delay the proposal.
The last time an Australian government attempted to introduce compulsory third party property damage insurance was in 1995, when the SA Government floated the idea. Intense lobbying by insurers, coupled with an industry-financed advertising campaign to highlight the hazards of non-insurance, led to the move being shelved.
Transport Safety Minister Harry Duynhoven has released a discussion paper that estimates about a quarter of NZ drivers are uninsured at an annual cost of up to $NZ85 million ($68 million).
Proposed measures could “be a major incentive in getting people to take greater responsibility for their driving behaviour,” he said.
The policy would only cover property damage, as NZ’s Accident Compensation Corporation already covers drivers for personal injury.
The paper suggests private insurers could provide compulsory cover at market rates, with high premiums for risky drivers to encourage safer habits.
But Insurance Council of New Zealand (ICNZ) CEO Chris Ryan says many high-risk drivers are likely to ignore any legislation.
He told insuranceNEWS.com.au the country has been toying with compulsory cover for 20 years.
“Some insurance companies are happy about the idea, others less so,” Mr Ryan said. “The questions are around the premium levels, and policing costs. This is a discussion paper and there’s some way to go.”
Submissions to the document close on August 8. A general election is expected in NZ by December and is likely to delay the proposal.
The last time an Australian government attempted to introduce compulsory third party property damage insurance was in 1995, when the SA Government floated the idea. Intense lobbying by insurers, coupled with an industry-financed advertising campaign to highlight the hazards of non-insurance, led to the move being shelved.