Compulsory third party vehicle insurance now in doubt

A government decision on compulsory third party vehicle insurance is in doubt after research showing the majority of kiwis already have vehicle insurance.Part of a Ministry of Transport review of the compulsory insurance issue, the survey of 4,000 New Zealanders found 92.4% had motor vehicle insurance.Transport Minister Steven Joyce said while the survey results did not mean ruling out compulsory third party vehicle insurance, the proposal might not deliver the expected benefits.

A government decision on compulsory third party vehicle insurance is in doubt after research showing the majority of kiwis already have vehicle insurance.

Part of a Ministry of Transport review of the compulsory insurance issue, the survey of 4,000 New Zealanders found 92.4% had motor vehicle insurance.

Transport Minister Steven Joyce said while the survey results did not mean ruling out compulsory third party vehicle insurance, the proposal might not deliver the expected benefits.

"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."

The level of uninsured motor vehicles was similar to countries overseas where vehicle insurance was compulsory, including the UK, where an estimated 6% of motorists were uninsured.

Mr Joyce said countries without compulsory vehicle insurance included 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.”

The government is considering compulsory third party insurance as part of the Safer Journeys road safety strategy to 2020, expected for release soon.

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