Research shows compulsory third party insurance may not be beneficial in NZ
A survey of 4000 New Zealanders found that 92.4% of New Zealanders have motor vehicle insurance while the other 7.6% of vehicle owners either had an uninsured vehicle or did not know whether their vehicle was insured.
This research was carried out as part of a Ministry of Transport review of the issue of compulsory third party insurance, and the level is similiar to countries that have compulsory vehicle insurance.
“While this survey doesn’t mean we are ruling out compulsory third party vehicle insurance, it does mean that the proposal may not deliver the benefits that might have been expected, because New Zealanders already have a high level of insurance,” says Joyce.
“We are looking to choose the mix of actions that can make a significant improvement to New Zealand’s road safety, at the least additional cost to motorists. This research will be important to further inform debate about which road safety actions will have the most impact.”
In the United Kingdom, where vehicle insurance is compulsory, 6% of motorists are estimated to be uninsured. It is estimated that 13.8% of motorists in the United States are uninsured.
Joyce also noted that countries that do have compulsory vehicle insurance include the cost of injury cover in that insurance, whereas in New Zealand that cost is covered by ACC levies.
“That means that the premiums in New Zealand for such insurance are unlikely to be the high priced deterrent to young drivers owning vehicles that many New Zealanders seek”, says Joyce.
The research also found that young people did not own the majority of uninsured vehicles. While 70% of uninsured vehicles were owned by people under the age of 40, there was a fairly even split between those aged under 25 years and those aged over 25 years.
The most common reason given by people for not insuring their vehicle was that they could not afford to do so. Other reasons included that the person had not got around to it, they thought that their vehicle was not worth insuring, or they thought that they were a safe driver and did not need insurance.