Insurance companies raise car premiums

Press, Volume CXI, Issue 32564, 25 March 1971, Page 1

Insurance companies raise car premiums

(New Zealand Press Association) AUCKLAND, March 23. Two of the largest motor vehicle insurance companies in the country have increased their premium rates for most vehicles, and the large group of companies charging common rates is expected to do the same soon.

The State Insurance Office has introduced an across-the-board increase of 15 per cent and the N.I.M.U. Insurance Company has raised its rates about 10 per cent. The 35 or so smaller companies in the common tariff group will raise their rates this year, and one source said today that the increase was likely to be above 20 per cent.

Apart from this, motorists will have to pay 25 per cent more for third-party insurance in the coming licensing year.

The rising cost of claims also appears to be the main cause for the increased cost |of ordinary accident insurlance. In a notice to policy--holders, the N.I.M.U. says : that the cost of repairing damaged vehicles, especially -labour, materials and spare I parts, has risen strongly.

Mr B. J. Tonks, Auckland manager of the State Insurance Office, said the low profitability of motor vehicle insurance was a world-wide problem. The recent collapse of the large Vehicle and General Insurance Company, Ltd, in Britain, was just one indication of this. An official of another insurance company said today that to act against increased claim costs, the company would penalise those most responsible for large claims —the young drivers.

It is imposing a 40 per cent increase in premiums on all drivers under 25. Mandatory minimum excesses ranging between $5O and $l5O will also apply to this age-group. Rates for drivers of 25 will remain the same. “There is never a claim in which a youngster is involved which is not a major claim,” the official said. “On the other hand there is rarely a major claim when an older driver is involved.

“The young driver is crippling the system for himself and for everyone else. “The ideal solution is to force these youngsters off the roads. If their parents are not going to be sufficiently responsible to do it, then the insurance companies will have to do it—perhaps by hitting their pockets so hard that they’ll have to begin to care or stop driving.” Mr E. Lane, president of the Insurance Council of New Zealand, said that the com-mon-tariff companies would have to raise their premium rates this year. The average percentage increase for each company might be different as the tariff was only a minimum, and some companies were charging above it. It is believed that the council’s motor vehicle subcommittee recently recommended an across-the-board tariff increase of 22 per cent, effective from May 1. (Third-party premium rises, Page 2)