Car insurance still non-compulsory in New Zealand

Date: 13/12/2012

The New Zealand government has spoken out saying that it will not bow to pressure to make third-party car insurance compulsory in the country.

At present, around eight per cent of drivers on New Zealand's roads do not have insurance which would cover the costs of damage if they cause a crash.

A recent online poll was carried out by Canstar Blue, and it found that 93 per cent of policyholders think insurance should be made compulsory, reports TV ONE's Breakfast.

The Ministry of Transport has responded saying that administration costs in altering the law would be too high and therefore it is unlikely to change in the near future.

It also added that enforcing such legislation would be difficult and labour intensive, so would not necessarily make any discernable difference.

The Insurance Council backed up this viewpoint, suggesting that an extra NZ$50 (£26) would have to be added to every insurance holder's policy in order to cover the costs.

Mike Noon, from the AA, told the news provider: "It would add a lot of cost to everyone's policy and I guess the people you really want to insure their car - they might be driving their car now unwarranted and uninsured - they're not going to want to drive it insured."

He went on to compare the percentage of motorists driving with insurance in New Zealand with that of the UK, where it is compulsory.

In New Zealand 92 per cent of drivers have insurance and in the UK it is 96 per cent, but in Britain it is used to cover personal injury claims as well as damage.

The (ACC) Accident Compensation Corporation in New Zealand already covers such claims, so it is therefore not seen as necessary for this role.

Mr Noon explained: "We pay for it with our registration and every time we buy a litre of petrol."

Posted by Nick Anderson

International Transport News and Sustainable Transport News