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Summarised by Centrist
According to the Insurance Council, about a quarter of Kiwi drivers have been hit by someone uninsured.
Yet the government has long resisted mandating even basic third-party cover.
Supporters of compulsory insurance say it would prevent innocent drivers from facing repair bills they can’t afford. At a minimum, compulsory schemes overseas cover third-party damage, leaving the at-fault driver to cover their losses.
But there are costs to mandating coverage. Those least likely to have insurance now are the ones who can’t afford it. And forcing insurers to cover high-risk drivers at affordable rates could push up premiums for everyone. “Mandatory insurance can hike up the prices for everyone because insurers would have to give their normal selection criteria away,” John Lucas, the Insurance Council of New Zealand’s insurance manager, noted.
New Zealand’s ACC system is another factor. In countries like the US, injury-related claims are the biggest driver of compulsory car insurance. But in New Zealand, accident victims are covered by ACC regardless of fault – funded via petrol taxes and vehicle levies. That makes bodily injury claims less of a legal battleground.
Even under the current system, those with comprehensive cover who can identify the at-fault driver often avoid penalties. “You would not lose your no-claims bonus,” Lucas said. “They would treat it as though the other party had insurance.”
But when a hit-and-run occurs, not even mandatory third-party cover would help unless the offender is identified.
