Time to re­think com­pul­sory car cover

The Tribune (NZ) - - YOUR HEALTH - ROB STOCK rob.stock@fair­fax­me­dia.co.nz

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.

PHOTO: PA­TRICK HOFMEESTER/123RF

Let’s hope the guy at the back, who shunted the other cars into each other, has been pay­ing his pre­mi­ums.

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