THIRD PARTY RISK

Dominion, Volume 31, Issue 153, 25 March 1938, Page 10

THIRD PARTY RISK

New Scale Of Premiums Adopted INCREASE IN RATES Higher Cost Of Claims For Personal Injury Regulations providing for a new scale of premiums for the compulsory insurance of motor-vehicles against claims for personal injuries suffered by third parties were issued last night. The new scale, wliich has been fixed for the 11)38-39 year, Will come into force on June 1. It has been adopted after careful consideration of recommendations made by insurance organisations, the increased cost of claim liabilities during recent years, and all the conditions involved in the phenomenal increase in motor traffic. There were over 267,000 motor-vehicles licensed throughout the Dominion at the end of lastyear. The new rates of third party insurance are these• Private motor-cars .... 20/Dealers’ vehicles 40/Business cars 48/Tuxis and private hire cars • 150/Vebicles not otherwise specified' 20/Trade motors 80/All of those rates, excepting trade motors, represent varying increases, but in each class of vehicle the increase is still considerably less than the rate recommended by thei organisations carrying the Insurance risks. Statement by Primo Minister. . A statement on the subject was also issued last evening by the Prime Minister, Rt. Hon. M. J. Savage. He explained that representations were made through the Minister of Transport, Hon. K. Semple, to the Government by the organisations undertaking the compulsory third-party insurance of motorvehicles that the number of claims for personal injury, and also the amount of damages for different types of injury, had been increasing from year to year since 1928, when the Motor Vehicles Insurance (Third Party Risks,) Act was passed. For example, the total claim liabilities for the three relicensing years ended Slay 31 last amounted to £829,140, exceeding the sum of premiums by £129,176. This meant that for each £lOO received in premiums during that period the claims liability was £llB/0/-. The claims cost for each private car was 23/7, as against a premium of 17/-. It was pointed out by the insurance companies that in order to place third party insurance on a self-supporting basis and allow a small margin for expenses, it would be necessary to raise the rate on private cars and on other vehicles in proportion to the existing scale of premiums. Insurance Companies’ View. Mr. Savage said that the insurance organisations recommended that the premium on private cars should be increased from 17/- to 25/-; the rate on taxis from 120/- to 190/-; the rate on trade motors from 30/- to 34/-; and similarly with other classes of motor .vehicles. The Government, after looking thoroughly into the position, fixed the rates on private cars at 20/- instead of 25/-; on taxis at 150/- instead of 190/-; and to make no increase at all on the premium for trade motors. “The insurance companies have pointed out that’despite the increases they jointly reqpmmend the New Zealand third-party risks premiums would still easily be the lowest in the world,” said the Prime Minister. “In Great Britain, for instance, the minimum premium for a private car is £3/16/6, rising to £l3/15/6 on a horse-power basis.”