Herald on Third Party Insurance

January 9th, 2010 at 11:34 am by David Farrar

The Herald editorial:

Surely Transport Minister Steven Joyce is not serious when he suggests the Government is reconsidering the introduction of compulsory third-party vehicle insurance because most people have it. Officials have given him a survey in which only 7.6 per cent of respondents admitted to having no car insurance or were unaware whether they did.

Leaving aside the reliability of the survey, the results say nothing about the need for a law. Third-party insurance covers damage the insurer might cause to another vehicle. It is, or should be, a minimum obligation every road-user owes to all others. The fact that most people recognise this without compulsion is no reason not to make it so.

Yes it is. It means there is no particular problem to be solved, and more to the point compulsion is unlikely to increase the coverage from 92.4% (higher than many countries where it is compulsory) so why would you impose on taxpayers the cost of a law and bureaucracy that won’t actually achieve anything.

On that principle, there would be no reason to legislate against all sorts of offences that the vast majority of people by nature would not commit.

Here the Herald loses it. How is bashing someone up, or other various crimes, comparable to a decision not to have third party vehicle insurance?

16 Responses to “Herald on Third Party Insurance”

  1. PeterG (24 comments) says:

    I’ve always considered compulsory 3rd party insurance, the markets way of looking after boy racers. The market will set the price for insurance in accordance with the risk factor. Then that will naturally encourage boy racers into more moderate cars. Would need to be some sort of confiscation regime in place for persistantly non-insured cars though.

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  2. Southern Raider (2,119 comments) says:

    Thats crap DPF. Ever been hit by an uninsured driver and then tried to get the damage resolved.

    You sound like a lefty pointing the onus on the responsible people and letting the idiots off.

    How would compulsory 3rd party insurance be more costly or require a big bureaucracy?

    Simply add it to the car registration process. If you get pulled over an have no rego your car gets impounded.

    Difficult to have an accident with an uninsured driver when they don’t have a car.

    [DPF: Again in countries where such insurance is compulsory, their registration rates are lower than NZ.

    Boy racers will not get insurance just because it is mandatory. Just as they don’t stop boy racing because it is illegal. They’ll just collect lots of fines they’ll never pay.]

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  3. peterwn (4,338 comments) says:

    About 30 years ago, the Power Boards were lobbying the Government for third party property damage insurance because they had difficulty with being paid when a car banged into a power pole. Yet the related bad debts would be a drop in the bucket compared with their turnover. the Government said ‘nix’. Coming to think of it it was probably some individual Board member who pushed the issue at each annual conference and the others supported it like sheep.

    In UK there is compulsory 3rd party insurance for injury and property damage (there is no ACC there). However a motorist is only required to carry 15,000 pounds of insurance which is pretty useless for meeting claims for serious injury or T boning a Roller.

    The political problem with trying to clobber boy racers in this way, is that it clobbers responsible young people too, and they will retaliate via the ballot box.

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  4. gazzmaniac (2,845 comments) says:

    As soon as it becomes compulsory the insurance companies will raise their premiums, partly because of the increased risk due to having to take on previously uninsured drivers, and partly because they can.
    What about people who choose not to register their car? They aren’t covered currently and won’t be covered under a new law. It may also encourage more people to not register their cars.
    I also might point out that CTP in Australia is for injury only – property damage is not compulsory and nor should it be.

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  5. Southern Raider (2,119 comments) says:

    Gazzmaniac if you don’t register your car then it should just be impounded. Simple

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  6. Elijah Lineberry (306 comments) says:

    As usual anything which may be compulsory, involve busybodyism, involve increasing the power of the State, involve reducing rights of individuals and the National party gets orgasmic about the idea and sets up a committee to see how they can impose further slavery on the general public.

    Why would anything compulsory be on the agenda when the National party claims to stand for freedom?


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  7. jcuknz (697 comments) says:

    Why should those irresponsible bastardas and bitches free load on the rest of us who take our responsibilities seriously? I like the Aussie story I saw the other night with a select number of police cars fitted with camera readers which tell the police if a car is not registered. With a system like that around I’m sure the figures would be close to 100% compliance. Naturally if there is a chance of getting away with it then some will ‘forget’ to register and insure.

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  8. CharlieBrown (1,774 comments) says:

    DPF, I don’t understand the nats point. Wouldn’t it be more preferable to make 3rd party insurance compulsory since only a tiny minority aren’t insured rather than making it compulsory when a bigger number of people aren’t insured? Making a small minority get insured affects less people so the intrusion is smaller. Secondly, if the survey pointed to a large number of people being uninsured, wouldn’t that actually discourage the argument of making it compulsory since uninsured people causing crashes and not paying up isn’t causing many problems, especially when you work out the averages. IE, todays problems are being caused by a small minority rather than a larger number of uninsured drivers

    By the way, I’m not in favour of compulsion providing that people causing crashes and are uninsured have to pay back what they owe.

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  9. jcuknz (697 comments) says:

    If somebody doesn’t pay their fine then withold the vehicle, except perhaps to let them get to work, until they have paid the fine … from the size of outstanding fines I’d bet it is not just ‘boy-racers’ but also ‘distinguished’ members of society who think it is a wank not to pay fines for their irresponsible and careless use of vehicles on our roads. If it is not their vehicle then it likely would teach the owner not to lend their car to law-breakers, it still should be confiscated. It is nothing to do with freedom but rather responsibility. Anyone who links it to freedom of action is pretty mindless with their wires twisted.

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  10. Steve (5,004 comments) says:

    The average dysfunctional dropkick who has never insured a vehicle will continue to drive uninsured. They will not comply with any law, they never have.

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  11. Rex Widerstrom (5,130 comments) says:

    Hold on… a Minister is responding to a situation in which people overwhelmingly supported a particular course of action by considering doing what he’s told by those who elected him?!

    I need a lie down, after which I shall pop a cork on something bubbly.

    But why this issue? And when will the rest of them commit to following suit?

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  12. gazzmaniac (2,845 comments) says:

    Ummm – I voted for the government and I don’t support compulsory liability insurance. I choose to insure my vehicle because I don’t want to be liable for replacing somebody’s ferrari if I hit it. I don’t think it should be compulsory as one day I might choose to underwrite my own vehicle. BTW this is far more reaching than everyone imagines – many large businesses choose to underwrite their own vehicles, and they can afford to pay for any accidents.
    Also, why should your car be impounded if you don’t insure it? That is simply theft – what if you want to use it for spare parts?
    I think somebody is in the pockets of the insurance companies.

    I also think that the government is going the right way to not getting re-elected.

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  13. CharlieBrown (1,774 comments) says:

    gazzmaniac – Does it concern you that if there had been more people uninsured then National would have made it compulsory? Despite the fact that the uninsured driver to at-fault crash ration would be far smaller?

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  14. Elijah Lineberry (306 comments) says:

    Gazzmaniac 7:40pm … how silly of you (and several hundred thousand others) to have voted for people who always want to make you do things whether you want to or not.

    libertarianz.org.nz is whom you should have voted for if you do not want things to be compulsory….


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  15. campit (482 comments) says:

    I’m interested to know where the Insurance Council stands in all this. Surely the relevant statistic is the proportion of uninsured drivers involved in accidents, which I’m guessing would be much higher than 7.6% (Just the other day a friend was involved in a three car smash. Two of the cars were uninsured, but he had full cover.) The Insurance Council would have the stats, they should release them.

    I’m inclined to think that the Insurance Council prefer the status quo – those that do pay insurance are forced to pay higher full cover premiums in order to cover for the likelihood of being hit by an uninsured driver.

    I also think the system in the US where insurance is compulsory and premiums are linked to your driving record could see a significant improvement in the standard of driving in New Zealand. Basically in the States if you are caught for speeding or some other violation more than three times then your premiums become very steep.

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  16. jeremyn (19 comments) says:

    What we genuinely need is a way to garnish the wages of hoodies driving riced cars (those with modifications to make them uglier and slower- heavy speakers draining engine power through the alternator, spoilers on the wrong end of wrong wheel drive cars), who crash into people driving real cars while uninsured. How does the government collecting more fines help? Those fines don’t go to real people.

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