The Insurance Council of Australia (ICA) wants taxis in Victoria to carry mandatory third-party property damage insurance.

In its submission to the Victorian Government’s Taxi Industry Inquiry, ICA points out that up to 70% of Victorian taxis don’t carry third-party property insurance, leaving taxi drivers vulnerable to costly repairs after crashes.

It says third-party property insurance for taxis is compulsory in the ACT, NSW and WA.

Insurance companies are often unable to recover costs when one of their not-at-fault insureds collides with a taxi.

The submission says a lack of third-party property insurance can also create difficulties for ordinary uninsured drivers recovering costs from at-fault uninsured cab drivers.

ICA says many existing insurance arrangements involving taxi clubs and taxi operators in Victoria are inadequate as they often leave drivers without cover. They also lack formal and transparent claims-handling processes.

It says insurers and not-at-fault drivers have great difficulty making recoveries from taxi clubs, even where drivers have paid excesses to such clubs.