Compulsory Third Party Insurance for all vehicles

quote:Originally posted by DiDi

As for compulsory third party car insurance - are they kidding? You pay $160 to insure your TP dunger and hit a $100,000 Mercedes and the Insurance Company has to pay out on it! The ignorance of this proposal blows me away. We will all pay, those of us who "do the right thing" and pay our wack. Expect a huge increase in Car Insurance costs if this goes through. So why the silence?

I thought it might be a good idea to start a new thread on this topic as it's one that I and possibly various others (like Tigger by the look of it) are also concerned with.

I believe that Third Party Insurance should be compulsory in NZ, and should be levied as part of your vehicle registration. Then we could be sure that no uninsured vehicles are on our roads. If the owner of a vehicle can't afford Third Party Insurance, it shouldn't be allowed on NZ roads. Simple!

Where is the problem with that [?]

I'm interested in both sides of this too...[]

As far as I can see, those of us who 'do the right thing' get hit under the current regime (no pun intended:)) as if an uninsured driver hits us, we have to pay the excess and also lose our no claims bonus as I understand it? Happy to be corrected if I am wrong in this...

quote:Originally posted by tigger

As far as I can see, those of us who 'do the right thing' get hit under the current regime (no pun intended:)) as if an uninsured driver hits us, we have to pay the excess and also lose our no claims bonus as I understand it?

Exactly! Those of us who have insurance are currently paying for those who don't.

With compulsory TP insurance, the burden would be spread across ALL vehicle owners. Of course, it would be necessary to ensure that such a scheme covered the costs of providing such insurance, which I suspect is the difficulty DiDi is alluding to.

When you look at the big picture, insurance is a very small part of the annual cost of running a vehicle. If you let people get away without paying for insurance though (as is currently the case), then those people are free-loading off the rest of us who do have insurance.

In my experience, most insurers are pretty lenient about the no-claims bonus. If it wasn't your fault, then you don't generally lose it, you only pay the excess. We even had one case where one of my employees was at fault in an accident, so we made the claim and paid the excess. At the next renewal, we didn't lose our no-claims bonus because the broker looked at our total business and decided that one claim out of 4 vehicles over the past several years was insignificant compared to the annual premiums paid. A good insurance broker is definitely on your side

The broker we use recently challenged an assessment made by the "Loss Adjuster" on behalf of one of our insurers. They backed down and paid out the full claim, as was only fair, given the circumstances If I had been Joe Public dealing directly with the insurer, there's no way that would have happened.

We have compulsory CTP green slip insurance in NSW, that means personal damage to other parties. You are "supposed" to have at least "bomb" (3rd party) insurance to protect other property, or comprehensive if you want your own vehicle repaired as well.

I have "bomb" on my car as it doesn't go further than local, Hubby has comprehensive on his.

However if people don't bother to pay rego etc, and they cause damage, you would have to be take them to court to recover expenses. Usually these types don't care and don't have anything anyway because they spend their money elsewhere.

This is NSW system. Different in every state. About time they started to crush vehicles being driven unlawfully and unlicenced tossers. That might just put a stop to it all when they run out of cheap replacement cars...(unless they keep stealing them of course, then chop off their hands.).[:0][8D]

Grant, I do understand where you are coming from but the reality is that I don't believe it will make any difference to those who are abusing the Law regardless but will increase the cost for all those who abide by the rules.

You can buy cars so cheaply now that I believe there is a calculated risk taken by many not to register, insure or warrant their vehicles as any crash is just a walk away. Shrug shoulders. What is the Law as it stands for you the not at fault party? Get the rego number. Now assuming that the owner gives you a false name/address and the police are too busy to attend a non injury accident,then what? If the Registration Plate has been stolen from another vehicle etc etc etc. You still lose.

On the face of it, if the driver is doing nothing wrong and does not come to police attention while driving from A to B - it is a calculated risk worth in excess of $500 a year to not pay for TP insurance, rego and WOF. What about the young kids in their turbo, modified vehicles? Even with a clean driving record and all modifications done to specification, they are hit by huge insurance bills and even bigger excesses. This can easily add up to more than the car is worth. So what happens with your "inclusive" at Rego cost then? The guy driving the Toyota Corolla is pinged to cover the guy driving the Holden Commodore HSV V8 or the 18 year old in a modified vehicle? If not, is that not going to add to the Rego fees for all the extra work the VTNZ is going to have to do to differentiate between vehicles. Believe me - there are people with HSV Commodores driving on TP only (it won't happen to me but just in case I hit a Mercedes) just as there are people driving restored army trucks that would total any vehicle on the road if they mildly bumped into them.

Referring to the police side of things - I live in a rural area and have parked next to non registered and warranted vehicles with bald tyres, child restraints not fitted but in the front seat etc and where are the police on the weekend? The station shut at 4pm on Friday and the only police vehicles that randomly cruise the area (from the broader District) are not taking the time to check out cars in the carparks! They are going to increase the traffic wardens shortly but will they be there on the weekend? I doubt it so you are free to use your dangerous vehicle on the weekends with the chance of seeing a police vehicle a bit like the chance of winning Lotto that evening! Baclk to calculated risk.

Sorry to waffle on but this is something I have thought about and am looking at it negatively in terms of enforcement rather than the ideal that it will be good for all. Pessimist! Interested in others opinions.

Interesting point you make, Didi - not many people realise that council parking wardens can ping you for not having a rego or WOF. I believe you are more likely to be caught by a parking warden than a cop, but having said that, I would say on average I get pulled over on all-inclusive roadside check points at least twice a year...and I am not a boy racer or in a dunger of a car either [}].

There are always going to be some who will break the law regardless, but on the face of it, wouldn't compulsory third party pull more people into the loop who might just not bother at the moment, but who still register their car and wouldn't want to be breaking the law by not registering it, as would be the case if third party was linked into the rego process?

PS as far as enforcement goes, I have a real problem with the fines system etc for cars, the boy racers that are reported as having several thousand dollars of fines stacked up etc. I don't see why the cops can't have the right to confiscate the vehicles to sell to pay the fines before it gets to that level of default. Don't even start me on those parents who pay their fines for them, or who make as an excuse, when these kids are killed in a police pursuit, that it was the cops fault as the kids were worried they'd be pinged for another fine

quote:Originally posted by DiDi

What is the Law as it stands for you the not at fault party? Get the rego number. Now assuming that the owner gives you a false name/address and the police are too busy to attend a non injury accident,then what? If the Registration Plate has been stolen from another vehicle etc etc etc. You still lose.

You made a good point there DiDi, that's an angle I hadn't thought of. I guess there is no way of knowing whether licence plates are stolen or not, unless you want to go checking the Motor Vehicle Database all the time. As a percentage of the total vehicles on the road though, how many would be displaying stolen plates? It can't be a huge number I wouldn't have thought. Which means the likelihood of being run into by a vehicle with stolen plates is probably very small.

quote:Originally posted by DiDi

You can buy cars so cheaply now that I believe there is a calculated risk taken by many not to register, insure or warrant their vehicles as any crash is just a walk away. Shrug shoulders...Referring to the police side of things - I live in a rural area and have parked next to non registered and warranted vehicles with bald tyres, child restraints not fitted but in the front seat etc...so you are free to use your dangerous vehicle on the weekends with the chance of seeing a police vehicle a bit like the chance of winning Lotto that evening! Baclk to calculated risk.

For any vehicles we drive, whether they are new or old, it would be complete folly not to have a Rego and WOF because we are frequently in Auckland and sometimes at the Airport where they are particularly vigilant with regard to picking up on expired Regos and WOFs. A few years ago, we had forgotten to get a new WOF on one of our vehicles and got pinged for that while parked briefly at the airport. During the course of a year, it would be virtually impossible not to be picked up in Auckland if you continuously had either an expired Rego or WOF.

I guess we live in a totally different world from some rural dwellers who rarely venture outside their remote area. As you have pointed out, for some of those people it may be a calculated risk worth taking to save the $500 per year.

But I do have to ask how many of those people are there likely to be across the country, when compared to all the bombs driving around Auckland which do have Regos and WOFs, but are without TP insurance.

quote:Originally posted by DiDi

...is that not going to add to the Rego fees for all the extra work the VTNZ is going to have to do to differentiate between vehicles.

Surely Third Party Insurance can be calculated at a uniform rate regardless of the type of vehicle being registered, because it is not the registered vehicle which is actually being covered, but rather the damage to someone else's vehicle. I'm sure the Actuarial Tables have all these calculations worked out, so it would just come down to a standard fee, levied on all Rego renewals, regardless of the type of vehicle.

That would hardly make any extra work for VTNZ as no doubt they would use various third party underwriters to provide the actual insurance cover anyway. Insurance is a competitive market, so there would be plenty of underwriters vying for such a large amount of business.

Insurance is a numbers game whereby everybody pays a little so no particular person loses heaps when a crash occurs. The more vehicle owners we can drag into the net in the first place, the lighter the load is on everybody concerned.

As Swaggie has pointed out, this type of insurance is compulsory in NSW -- and from what I have read, it is also compulsory in many other OECD countries -- so personally I believe it is only a matter of time until such regulations are introduced here as well.

Coming from the UK where third party insurance is a requirement, I believe it should be here. I was in a bike accident in the UK, not my fault in the slightest (plenty of witnesses substanciated it), he didn't stop, I guess probably not insured, my bike was a right off, I had a dislocated shoulder. I was insured, claimed on my insurance, and then my insurance renewal was about $1500 more than the previous year, so yes, i support compulsory insurance.

Absolutely should be compulsory. Plus the higher the engine size the higher the insurance for lower age drivers!

Just don't get me started on the driving skills here.....or should I say the lack of them!

Our CTP though only covers bodily injury to other parties, not property. I think it should have to cover both.

However too many people just don't bother to register their cars. If the cars were impounded by the parking wardens until they had been registered (as they are more likely to notice than the police) you might just get people thinking twice about it and keeping the insurance and rego up.

Out of interest, in NSW only have to have our cars inspected once a year (pink slip) by a mechanic. All that WOF'g in NZ confused me when I first heard about it.
New cars are exempt for the first couple of years too.

Grant - just know I am not arguing - just responding because you make equally valid points BUT... not knowing how to insert the bits that you respond too I hope this will make sense.

Stolen plates - of course the percentage is small (do we know?) until you know people who own gas stations and get hit frequently with the fill up and run vehicles... yep... stolen plates. I even was at one recently when an Audi did a runner! Unfortunetly not recorded on camera this time.

Second point about bombs driving around Auckland. I agree I guess but when you are 100k round trip to Auckland (or any other main centre in NZ) and you only have the money to own a bomb out in the country, you probably aren't that worried. When you say Auckland,and the population of Auckland as a whole, how many of those bomb owning people actually go INTO Auckland City or the Airport? I certainly don't when we have Mega Centres who cater for everything you may want closer to home. Tie it in with Registration? Same thing - who is going to Police it? I doubt the Mega Centres are the slightest bit interested in Road Safety - just making a dollar and the more cars in their carparks the better. Don't mess with it. I have only ever been stopped once in my entire 30 year driving history at a breath test site (as it happens) so why should I be worried? I am fully insured in case that came out wrong!

Thirdly, I can't for the life of me see any insurance company beating the door down to get all these vehicles on their books and covered for TP insurance. As you said - it is for the damage they do to other vehicles and that could cost mega thousands for the $160 the at fault person has paid for that cover. How many cars would they have to insure at $160 to recover say a total write off of ONE vehicle of say $12000. The Insurance companies want full cover taken out - not TP and so they should as then they get a return on their risk, hopefully, from people who care about their investment in a good car and endeavour to ensure they don't crash into someone else. Accidents happen - in fact I think I am right in saying that vehicle accidents are the biggest cost to Insurance Companies in NZ over any other type of claim. Mind, that may have changed with the crazy storms etc!

The point you make about the uniform rate is exactly what I was against. Why should Nana in her Daihatsu Mira be covering the Commodores worth $30 - 60,000? That is how it will work across the board and I certainly can't see the fairness in that. Are we presuming that those with expensive cars will not be dragging the figures down because they will have taken full insurance. Maybe - but as pointed out, that is not always the case and certainly not with the boy racers who love their Holden VL whatevers or their Skylines that go like rockets. Many are just not insuring because of the cost and compulsory TP at a lower rate will probably have them grinning. My personal support is to limit the HP that various ages are allowed to drive starting them with a 1300cc vehicle!

All I see is a huge increase in insurance for all vehicle owners. Why vehicles? What about all the people out there who don't take out house insurance and therefore avoid their contribution to across the Board Insurance levies, Fire Levies, Earthquake levies etc. The minute the poor person who hasn't insured loses everything in say a house fire, we have people showering them with gifts of replacment stuff. Aren't they just as negligent to fairness for all those who insure their properties as those who don't take out car insurance?

As Swaggie pointed out, their insurance covers bodily injury - our workers are already taxed for that with ACC.

I could take this off on another whole tangent (must be the Sav Blanc) and say it isn't about individuals doing the right or wrong thing - it is about uniting the whole country with a marketing campaign that makes us all a team contributing to the welfare of each other and that means doing what is right if this is only one example (insurance) to lower the costs for all. Ain't going to happen thought while we pay millions for Rugby, obesity and ASH campaigns. Make life positive - not punative! That is my motto!

quote:Originally posted by DiDi

Grant - just know I am not arguing - just responding because you make equally valid points

Thanks for your very detailed and well thought out reply DiDi. I don't want to argue either, because we will just have to agree to disagree on many points.

However, I would like to see your response to a few points that crossed my mind while reading your reply:

quote:Originally posted by DiDi

Thirdly, I can't for the life of me see any insurance company beating the door down to get all these vehicles on their books and covered for TP insurance. As you said - it is for the damage they do to other vehicles and that could cost mega thousands for the $160 the at fault person has paid for that cover. How many cars would they have to insure at $160 to recover say a total write off of ONE vehicle of say $12000.

See, this is the thing:

* Vehicles are being damaged EVERY DAY by people who drive without any insurance.

* Currently, the insurance companies are left with trying to get their money out of some person who has very little.

* Usually they don't succeed, and that is why the premiums are so high for those of us who do choose to insure our vehicles.

* Wouldn't it be better if the currently uninsured people at least paid SOMETHING towards the damage they cause?

quote:Originally posted by DiDi

The point you make about the uniform rate is exactly what I was against. Why should Nana in her Daihatsu Mira be covering the Commodores worth $30 - 60,000? That is how it will work across the board and I certainly can't see the fairness in that.

In order to answer this question, it would be necessary to do some calculations and work out what the cost of Third Party Insurance would be if it was spread across EVERY PERSON who owns a vehicle.

Maybe it wouldn't work out to be very much at all. How many people do you know who never have any crashes year after year?

My last claim -- excepting a broken windscreen or two -- was way back in 1983 and I don't think Inger has ever made a claim for anything that was her fault. We have both been driving for over 30 years, so that's a lot of premiums we would have paid without making any claims at all.

Sure there are people who seem to be involved in car crashes every year or two, but they are very much in the minority compared to the large number of careful drivers on our roads.

quote:Originally posted by DiDi

All I see is a huge increase in insurance for all vehicle owners.

For the reasons I have explained above, this isn't necessarily so. Someone would need to do the calculations and come up with some accurate costs in order to confirm or refute your statement.

The point I am trying to make is:

* The people who currently choose to insure their vehicles are paying ALL the insured costs of road crashes under the present regime, whether they are at fault or not.

* Clearly, that isn't fair either.

* If there was a way to spread this load across the largest possible number of people who drive on our roads, it would be fairer.

Should we be looking at adding a levy to the cost of renewing your driver's licence instead? That way it would spread the cost across every DRIVER rather than just every VEHICLE OWNER. Every driver is equally at risk from the actions of others, so it is fair that every driver should help to pay for their share of that risk.

There has to be a better way than sticking with the status quo as we have done for so long.

This is a good debate and some excellent points have been raised. Thanks for your responses so far. The way that you "Insert the Bits" is by clicking on "REPLY WITH QUOTE" instead of using the "Quick Reply" box. I hope that helps.

I think it should be a requirement when you take out a loan for a car, that you have car insurance or you don't get the loan. So many boy racer types rely on mummy to bale them out when there is a problem, and they need to take responsibility for owning a car, if they are going to own a car. It should be compulsary to have insurance as it is to have rego and warrent.

I don't see why it should cost the rest of us any more money, if people who currently aren't insured, have to be.

By having compulsory insurance makes others accountable for their actions and should stop poor drivers saying ah well ACC will pay, just ain't good enough is it!

I am interested in the point about $160 not being enough for insurance companies to be interested in providing third party cover (is that what you meant, Didi?)

My current vehicle is insured for $5000 and the full insurance on this is only $320. An insurance company obviously thought that it was worth their while to cover me for this much, so can't imagine them turning up their noses at $160 for a much lower level of cover/liability...