The single compulsory third-party insurer in the ACT, the NRMA, has announced a 7 per cent increase in premiums. The increase was approved by the ACT Government after independent advice, and in the context of the present system, it seems reasonable enough.
Registering a car in the ACT will be $17 more expensive from July 1, but
still cheaper than in NSW, after the NRMA announced yesterday a 7 per cent
hike in compulsory third party premiums for private vehicles.
The rise, from $252 to $269, takes the total cost of registering a car in
the ACT to $480. The ACT Government approved the increases after independent
expert advice agreed the rates were appropriate.
According to the NRMA the main reason for the rise was an increase of
almost 12 per cent in the average cost of claims for private vehicles.
Not all road users will be unhappy with the adjusted CTP rates. Riders of
motorcycles 300cc and above will benefit from a drop in their CTP rate from
$214 to $201 because of a decrease in the cost of accidents involving them.
Perhaps the most annoyed will be taxi drivers whose rate jumps from $2520
to $2954.
Currently the NRMA is the sole provider of CTP in the ACT, which covers
drivers for their liability in the case of any injuries they cause to
another person in an accident.
Urban Services Minister Tony De Domenico said yesterday that system was
on the way out with the Government planning to amend legislation to
encourage a competitive CTP market, similar to the green-slip system used in
NSW.
“In a competitive market insurers will be able to vary their premiums by
10 per cent to allow groups with better claims history to be rewarded,” Mr
De Domenico said. “This will allow motorists choice in their third-party
insurer.
“It is regrettable that this year’s premium increases are above
inflation, however, the fact remains that claims costs are rising faster
than inflation.”
Legislation for the new system would be in place by January 1 next year
but insurers had advised it was unlikely they would be in a position to do
business on CTP before July 1, 1997.
The ACT regional manager of the NRMA, Allan Gaukroger, said yesterday he
did not believe introducing competition would make CTP costs cheaper.
“Changing the system will make things more expensive for us because it
adds things like distribution costs, you have to pay for commissioned agents
to sell the green slips, and all insurers will have those costs,” he said.
Opposition spokesman on Urban Services and Opposition Leader, Andrew
Whitecross, agreed with the NRMA’s position.
“Since Mr De Domenico has been in all we’ve seen is an increase in
third-party costs and all we’ve heard is rhetoric about how he’s going to
bring them down, one day,” he said. “There is no guarantee that introducing
competition will bring the costs down.”