Time to rethink compulsory car cover
Why not have compulsory cheap third party insurance, which pays out, if you hit other motorists and cause damage?
A friend’s wife got run into by an uninsured driver last week.
The uninsured driver offered to pay for the excess, if only she’d tell the insurer it was a hit and run, and she didn’t get the licence plate.
There’s so much wrong here, it’s hard to know where to start.
Wrong One: Driving while uninsured loads unreasonable costs onto insured drivers, who have to pay extra to insure against the risk of some uninsured driver hitting them.
Wrong Two: If you aren’t insured, you aren’t paying your Fire Service levy to fund the emergency service that may one day have to cut you from the wreck of your burning car.
Wrong Three: Attempts at conspiracy to defraud an insurer are, well, illegal.
There’s probably a lot of silently insidious wrongs going on here: youngsters able to buy cars that are inappropriately powerful, or modified, which no insurer would cover them for.
Insurance also focuses people’s minds on the value of good driving records.
So why not have compulsory cheap third party insurance, which pays out, if you hit other motorists and cause damage?
Back in 2009, the country agonised over compulsion.
The fairness argument was strong, but the call for compulsion failed.
It was said New Zealand’s 7.6 per cent of non-insured motorists wasn’t much more than countries with compulsory insurance, though in some parts of New Zealand about 20 per cent of cars were uninsured.
Compulsory third party might actually drive up the cost of insurance for those who already had it, we were told, and insurers were against it.
They don’t earn much from third party, and didn’t want to insure the wild and reckless.
I suspect, they would also fear having the spotlight shone on all those who they deny insurance to, who actually ask for it. Let’s be fair. Not all those who don’t insure are reckless drivers.
When the Transport Agency surveyed the uninsured, a third said they couldn’t afford it.
You could make an argument that someone who can’t afford insurance should take the bus.
I sympathise with that thought, while realising that poorer folk have in recent decades been driven to the fringes of our cities and have home lives blighted by low wages, split shifts and flexible working hours.
And yet, if they did hit a Mercedes, it would prove a false economy. The insurer would sue them, and it could take years to clear the debt.
Yet the sense of rankling unfairness remains.
If a compulsory scheme wouldn’t work, I wonder whether we should institute a system where the fire levy is charged on the registration instead. That would be a start.
Perhaps we could even issue two kinds of regos; one for the insured, and one for the uninsured, with the proceeds being pooled to recompense insurers’ costs in footing repair bills, hopefully bringing premiums down for the insured.
Uninsured rego stickers could be luminous red, and have to be displayed back and front. Then the rest of us could give them a wide berth.
Let’s hope the guy at the back, who shunted the other cars into each other, has been paying his premiums.