KEY POINTS:
On the face of it, Cabinet's floating the idea of compulsory third-party motor-vehicle insurance seems a little like responding to a broken window by painting the roof.
The decision, announced on Monday, does not foreshadow a law change but only a public discussion. But it seems to spring from, and is certainly associated in the public mind with, the death in May of 20-year-old Scott Finn in an illegal car race in Mt Maunganui. Thus it looks like an attempt to deal with so-called boy racers - and in particular to cut the death toll of their antics - by making them buy insurance.
Little surprise then that it has attracted hoots of derision from those who say that an insured car does just as much damage as an uninsured one given that they are travelling at the same speed when they crash. But compulsory third-party insurance has other reasons to recommend it.
The idea has traditionally been opposed by the insurance industry because it requires insurers to accept into their risk-pool drivers who, having not already insured on their own initiative, are likely to be less conservative than the existing pool. In purely actuarial terms, this is doubtless true, but it overstates the case. Any insured driver who has been hit by an uninsured one will tell you that the guilty uninsured one can often shrug and walk away. Thus insured drivers already carry the risk of careless uninsured ones; they would be no worse off carrying the risk of incautious road users who did have basic insurance cover.
Harder to deal with is the meaning of the word "compulsory" in this discussion. The Insurance Council says it will support a law change if the Government provides the tools to make it work. That is fair enough. There is no reason why private enterprise should be saddled with the costs of extracting compliance from recalcitrant customers delivered by legislative fiat. Neither should it be required to insure uninsurable drivers; prove yourself a bad risk and you don't get to drive any more.
Compelling a group that has demonstrated its reluctance to insure voluntarily calls for creative thinking but it doesn't have to be completely lateral. Third-party insurance could be built into registration payments, for example, with provision for people already insured to opt out of the scheme by producing a bar-coded document attesting to their cover at the time of re-registration. The existing computer link-up of warrant-of-fitness and registration records was introduced without difficulty and it is not hard to imagine a dozen different ways of making mandatory third-party cover work, provided there is the will.
The idea of compulsion was rejected in the 1980s and 1990s, in part because overseas evidence suggested that it would lead to more unregistered cars being on the road as people avoided the extra costs of insurance. But that's a self-defeating argument: likelihood of non-compliance with a law is less a reason against passing it than evidence that it is needed.
No, of course, compulsory third-party insurance will not solve the "boy racer" problem. It will not bring Scott Finn back and it probably would not have saved his life. But it does provide another weapon in the battle against bad and dangerous drivers - whether or not they are eligible for the unfortunate "boy racer" epithet - and an extra level of protection for the rest of us.
In the meantime, other hoon-control measures warrant consideration. The V8 Supercar driver Greg Murphy, fronting a campaign by the Motor Trade Association to teach young drivers how to be safe on the road, says that nobody under 18 should be allowed to drive modified high-powered vehicles. As we debate whether to raise the driving age, restrictions on engine capacity seem at least worth exploring.
