Commissioner Explains Third-Party Insurance

Press, Volume CIV, Issue 30795, 6 July 1965, Page 9

Commissioner Explains Third-Party Insurance

The £1 18s 6d difference between the car and station waggon annual third party insurance premiums for 1964-65 and the new licensing year which began on July 1, consists of Is for a worsening trend in accident experience and £1 17s 6d for indemnity on behalf of passengers carried free which took effect from July 1, said the Commissioner of Transport (Mr R. J. Polaschek). He was replying to certain matters raised by a correspondent, Harvey E. Mead, who in a letter to the editor of “The Press” asked: “While every year brings an increase in motor registration fees, the motorist appears to obtain nothing more in return for his money. Can any responsible authority explain why this year we are compelled to pay a staggering increase of 71 per cent on statutory thirdoarty insurance premiums? Can they, without trying to blind us with science, convince us that we will receive increased services in similar proportions? I think not.” “In fixing the premiums, the Government adopted the amount of £1 17s 6d, accepted by the Committee on Absolute Liability nearly two years ago as the likely figure required for the new extra cover for cars and station waggons, said Mr Polaschek. "The committee's recommendation was based upon a limit of £25,000 for all claims for any one accident, but the insurers in subsequent negotiations with the Government agreed that no such over-all limit should apply.” Mr Polaschek said that since compulsory motorvehicle third party insurance was introduced in 1928 until June 30, this year, idemnity for passengers had been confined to fare paying passengers carried in public passenger service vehicles. “Other passengers injured or the dependents of those killed by their drivers’ negligence have been ineligible for the statutory financial protection of the legislation: their only chance of compensation has been the driver’s personal ability to pay, or payment in terms of the driver’s passenger cover if he had voluntarily arranged such an extension to his comprehensive motor vehicle policy.” "From July 1 owners will be indemnified to a maximum of £5OOO on account of each passenger carried without charge for any one accident regardless of the number of passengers carried; this ensures financial protection on behalf of these passengers. An important feature is that this new cover applies to the wife or husband of the negligent driver.” said Mr Polaschek. He said many owners had passenger indemnity with

their comprehensive vehicle insurance policies, and it was understood that insurance companies were making adjustments either in the form of credits or rebates where optional cover was no longer required or by providing passenger indemnity above the new statutory maximum cover. “Car owners without passenger cover will pay £1 17s 6d extra for this in their new third party premiums: owners already carrying optional passenger insurance will have the benefit of a corresponding saving in this cover (if no longer required) or indemnity over the £5OOO statutory limit if they keep their optional policy going. Some owners with optional passenger cover carrying a premium of over £1 17s 6d. may pay less over-all if they abandon their optional policies,” he said. “The normal optional passenger cover policies do not indemnify owners against claims from husbands or wives or the family; this cover has been made available comparatively recently where sought but •at double the normal premium. “Owners with this extended family cover will find that the £1 17s 6d, extra for the third party insurance is generally less than their existing passenger premiums,” he said. “There is another major advantage in the new statutory passenger cover. The optional passenger indemnityoffered by insurance companies is a total sum either for all claims over the duration of the policy, or for all claims from any one accident; the new statutory indemnity provides a maximum of £5OOO for each passenger—regardless of the number carried—and it applies to each accident,” saitj Mr Polaschek.