Life and Limb

Sun (Auckland), Volume II, Issue 556, 8 January 1929, Page 8

Life and Limb

ACCIDENTS WITHOUT WORRY

Compulsory Third-Party Insurance

WHEN the New Zealand motor-vehicle owner next gets his new licence-plates he will pay an amount ranging from £1 upwards under a compulsory insurance scheme. This will be but another form of taxation, and will he his share towards giving financial protection to other road users from physical injury that may be caused by either the ordinary car driver, or by those who are financially and otherwise irresponsible, including the unlicensed, the drunken, and the thieving joy-rider types. The first year charge on private cars will probably be £l, but there is no indication that it will remain at that sum.

This is the result of the remarkable piece of legis'vtion called the “Third Party Insurance (Third Party Risks) Act,” unexpectedly passed during the closing rush of the last session of the Reform Party’s regime. There had almost been an undertaking that this legislation would be introduced and then left over, enabling it to receive the consideration it required, but in the finish it slipped through. Briefly, the Act provides that when car-owners pay their registration fees in May next they will pay £l, or whatever sum is later announced bv the Governor-General, to cover the

owner of the car concerned, against any physical injury or death his car may inflict on any person other than a member of his household, a servant, or a passenger in the car. Numberplates will not be issued until the sum is paid. The, owner will be able to nominate to which insurance company the amount shall be paid, provided the company has accepted the invitation to undertake this class of business, and the company will accept liability from the moment the amount is paid at the Post Office.

The insurance will not cover damage to the property of a third party, but will give unlimited cover for physical injury or death.

OBVIOUS SHORTCOMINGS

The private owner will find tt»t there are several remarkable provisions, but there are obvious shortcomings. Therrf is nothing, for instance. to provide redress for people injured on the road and left lying there, perhajts maimed for life or killed, with no evidence of the car causing the damage. As the Act has been announced as one to protect people from the reckless driver, the toper, and the irresponsible, this failure is regarded as a grave omission.

No provision is made for the man who already holds the fullest cover now available, though his car would certainly not be insured against drunken driving, or joy-riding. This extra cover may be very desirable from the point of view of the injured person, but it is a matter for concern from a public policy point of view. Very largely the new Act merely penalises the owner and forces him to protect the public financially from thieves and drunks.

There can be no suggestion that the Act will in any way tend to reduce the number of accidents. It is more likely to have the opposite effect. This has been borne out in other countries. Recently it was pointed out in England that if the insurance companies were to be forced to accept risks without consideration of the character or reputation of the driver, or the condition of his car, it would be interesting to see the manner in which the motorists accepted the increase in premiums that would be required.

BOOMERANG EFFECT

The State of Massachusetts, in America, supplied the reply, and some selected comments from several papers on their experience are as follow :

third-party insurance in Massachusetts, which came into operation for 1927, has acted as a boomerang. It seems to have bred in motorists the utmost disregard for their own or any other person’s safety. The result has been a heavy list of accidents, with equally heavy claims. There is a deuce of a hullabaloo. . . . The insurance companies, working on rates fixed by the Government, lost 1,633,832 dollars in 1927, instead of making a profit of 2\ per cent. . . . Compulsory insurance to take the place of personal responsibility is a questionable remedy. ... It was adopted against the advice of the best minds in and out of the insurance business. ... It was a foregone conclusion that there would be premium increases when the companies were forced to accept all classes and risks ”

VICTORIANS SIMPLE METHOD

Victoria, Australia, has produced the most simple method of dealing with the compulsory-insurance idea. Before getting his number-plates an owner must produce a certificate from an insurance company showing that he is insured against third-party risks. If the companies refused to insure any owner he could not get his licence, but the case probably would be bad before every company refused a policy. The New Zealand Act provides that an insurance company may proceed before a magistrate for the cancellation of a licence, but “once a driver always a driver,” and there appears to be no method by which the insurance company will be able to avoid the payment of damages if a man who loses his licence sees fit to drive a licensed «ar, and gets involved in an accident.

Though the principle of third-partv insurance has frequently been supported, the scheme that will be successful in operation has yet to be evolved, and the New Zealand Act appears to be far from the solution. For any good it is going to do, its cost is likely to be enormous.