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Govt Introducing Compulsory Third Party Insurance

Govt Introducing Compulsory Third Party Insurance


By Angela Beswick

The Government is preparing to introduce compulsory third party insurance for all New Zealand drivers.

The idea behind the scheme is to deter individuals like boy racers from the road, as they would be unable to afford the high premiums third party would entail.

However not everyone is convinced this will be successful. In a report by the Insurance Council of New Zealand, it is noted that the very people this legislation would be targeting are likely to ignore it.

“They would ignore it the way they currently ignore the other compulsory requirements they should have in order to be on the road,” Chris Ryan, Chief Executive of the Insurance Council of New Zealand, says in the report.

The fact that many boy racers drive illegally modified cars means they are unlikely to abide by this law. According to Ryan, there are a number of other requirements not being met which need to be considered before the legislation for compulsory third party motor vehicle insurance is passed.

The three requirements outlined in the compulsory motor vehicle insurance report are that all drivers must have a current drivers licence, the vehicle must be registered, and have a current warrant of fitness.

Ryan says that although these are already compulsory for an individual to own and operate a motor vehicle, many vehicles are not ‘street legal’ and the requirements are not something that is being effectively policed.

“It’s our view that for any sort of compulsion regime to be effective, all the requirements need to be put in place, and most importantly, policed – not just one.”

Ben Quigan, a 21-year-old student and part of the age bracket this legislation targets, says he sees it as a good thing.

“It would make me feel safer on the road, knowing that if someone hit me, they would be able to front up with the money.”

Mike Noon, motoring affairs general manager for the Automobile Association, says he feels the plan will “demonise” young New Zealanders.

"They should not be targeted because they are young. Young people need access to vehicles to go to college, visit their friends and do sport."

He says current insurance options for motorists cover most situations and disqualification is enough to keep dangerous drivers off the road.

However he says the AA is willing to work with the Government to devise a workable law.

New Zealand currently has a form of compulsory insurance for personal injury from road crashes which is administered by ACC and financed through a levy taken with the annual vehicle licence fee and a levy per litre of petrol.

New Zealand does not currently have compulsory insurance for property damage from road crashes. This means that some uninsured drivers may avoid paying for property damage they cause, especially if they have little or no income.

In an interview with the Sunday Star Times Transport Safety Minister Harry Duynhoven said insurance companies spend between $53-85 million a year recovering the cost of crashes caused by uninsured motorists. Duynhoven says he is pushing for compulsory third party insurance so that responsible motorists will not be left out of pocket.

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Angela Beswick is a Journalism Student at AUT

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