Worry at younger drivers who lack insurance

WELLINGTON: Insurance firms are worried the high number of young drivers without insurance face huge costs if they crash.

Research from the Commission for Financial Capability showed only 59% of drivers aged between 18 to 34 have car insurance due to the high cost of policies.

Insurance Council chief executive Tim Grafton said young people were blind to the financial risks of crashing without any insurance cover.

Mr Grafton said insurance cover for young drivers or firsttime car owners could cost up to $400 a year.

Some might feel that it was not worth getting even thirdparty insurance because their car was old or cheap, he said.

‘‘The problem in not having thirdparty insurance for fire and theft is that you could crash into another vehicle — a $500,000 Maserati, and you could be liable for that cost.’’

Commission for Financial Capability personal finance editor Tom Hartmann said New Zealand should introduce black box technology that records individual drivers’ performance and rewards good driving with low premiums.

‘‘Internationally, we’re seeing the use of devices in order to give a more accurate idea of how good a driver a young person is, and you know, we’ve seen them save the cost of insurance of up to 40% on those premiums.’’

Drivers who crash without insurance could face longrunning debts too, he said.