THIRD PARTY.

Hawera Star, Volume XLVIII, 15 December 1928, Page 14

THIRD PARTY.

1 COMPULSORY INSURANCE. ( EXPERIENCE IN IDS.A. I Compulsory insurance has been clumsily handled in the -State -of Massachusetts and after a year’s trial some alterations have boon made. The premium of £1 which will he charged for the third party policy, which will be issued in New Zealand when relicensing is effected next May, is expected to be more than sufficient for this class ■of insurance, and after a year’s trial it. is more likely that the benefits will be extended than that the fee will be increased. The conservative lines on I which the scheme has evolved should prevent a repetition of the experience in America. Motorists in the majority agree that compulsory insurance is a good thing, and the hash which has been made of it in Massachusetts will no doubt be used as a strong argument by other States which are resisting the. measure. In the first place an attempt was made t'O operate the Massachusetts scheme on too low. a premium. There are over 700,000 registered motor-vehicles in Massachusetts, and judging from the first year’s trial of compulsory insurance there is a fair sprinkling of crooked lawyers and corrupt physicians. •On September Ist it was announced that the premium rates for cars would be practically doubled awing to losses sustained by the companies writing the policies. At the end of the year’s trial there were claims amounting to over £1,200,000 remaining to bo settled in the State, and allegations -of wholesale fraud were being investigated by the Attorney-General. It is stated that fraudulent claims during the year ammounted to over £200,000. It was found that drivers involved in accidents occasionally urged passengers to . make , claims for incapacities which did not occur. m 1 I During the year there were 31,h-l. cases of injury reported to the State

registrar of motors, yet the insurance companeis received 48,519 claims, and at the <>nd of the period had paid nearly 35,000, 'the balance remaining unsettled. In the year insurance companies in the State collected about £3,360,000 in premiums for compulsory liability. This included the higher rates charged for commercial vehicles and premiums in respect to these have not proved inadequate, and no increase is suggested. Over £1,200,000 was paid out in claims, and it is estimated that administration and other charges absorbed about £1,720,000, leaving only £440,000 to take care of over 13,000 outstanding claims.

Reviewing these operations the “New York Heradl Tribune” says:— “Opinion is general that the law is largely a failure. It was passed with the idea in the minds of many of the legislators and of a large portion of the public that it would have the effect of reducing accidents, personal injuries and particularly deaths by automobile accidents. 'To date this has not been found to be the ease. Last week there were nineteen highway fatalities in the State due to automobile accidents, five more than the week before and two more than in the corresponding last year. -Seven of the victims were children, and all but five of the victims were pedestrians. Gourt convictions against eighty-five drunken drivers were obtained, four of them being committed to gaol. Insurance cancellations accounted for 461 of the 929 licenses and registrations suspended or revoked during -the week. “More than, fifty of these revocations were for reckless driving, fifteen for fatal accidents, and eleven for driving away after . accdent—‘hit-and-run drivers. ’

“It is true that the compulsory insurance law has driven from the highways hundreds of rattletrap ears rescued from the junk heap and sold for a fow dollars. The rates for such vehicles were the same as for regular cars, and, as a matter of fact, the companies in many cases refused to write

insurance on them, in which stand they were backed by the Insurance Commissioner. “Certain individual lawyers known to the Insurance Department, have worked up over 460 cases each within a year, and some have been known to maintain a staff of solicitors who approach persons figuring as injured in an accident immediately after it is reported, to induce them to file claims for damages.”