Auckland, 24 February 2021 – Last year there were 320 claims involving uninsured drivers who caused car accidents worth more than a year of tertiary study, according to AA Insurance claims data.
“In 2020, the average fees and costs for a year’s study came to $11,4841,” says Amelia Macandrew, Customer Relations Manager for AA Insurance. “During the same year, the average cost of damage that these uninsured drivers were financially liable for was $19,114 or $6.1million collectively.”
“When you’re young and heading off to university, moving out of home or starting a new job, driving uninsured can have life changing consequences that far outweigh the cost of a premium,” says Amelia. “No matter how careful you are on the road, you can’t control what other drivers do. So, the question becomes, if you can’t afford insurance, can you afford to have an accident?”
If you’re not insured and cause an accident, then you’re liable to pay for the damage for the other car or property you hit. Third-party insurance would cover the damage you cause to someone else’s vehicle or property only. Comprehensive insurance would cover both the damage to someone else’s vehicle or property plus damage to your own vehicle.
In 2020, AA Insurance handled more than $26 million in claims involving over 8,000 uninsured drivers considered to be at fault in accidents with its customers. When tallied against findings from AA Insurance’s 2020 Lifestyle Survey, which shows 63% of Kiwi drivers have had an accident and 65% of those have had one or more accidents before they turn 30, the price of being uninsured can be a life-changer.
Yet, despite being more likely to have a car accident, young Kiwi drivers continue to undervalue the importance of having car insurance, often believing their own car isn’t worth insuring, or an accident won’t happen to them (70% of 18-29-year-olds strongly agreed that car insurance is important vs 86% of 55+ year-olds).
Sixteen uninsured drivers have been paying off their debt since 2008, at a combined total of $87,000. If they had been insured, their legal liability would have been covered - up to $20m for car insurance if insured with AA Insurance.
“Just like a student loan, it can take years, if not decades, for some uninsured drivers to pay off their debt,” says Amelia. “However, unlike students who have invested in their education to set them up for future, uninsured drivers are simply clearing their debt caused by a driving mistake. Imagine what that money could have otherwise been spent on?”
AA Insurance cites the case of one young uninsured driver who lost control of his vehicle in a mall car park, hitting our customer’s car and pushing it up against a wall. Both cars were damaged, but the driver is now paying over $40,600 back for the total loss of our customer’s car, at $100 a week for the next eight years.
In another example, an uninsured learner driver in her 30s became distracted and drifted across the centre line. She hit our customer’s car causing around $23,300 worth of damage. The uninsured driver is now paying back her debt at $50 a week for the next nine years, which doesn’t include the cost of repairing her own car.
In both examples, third party insurance would have covered the damage to our customers’ vehicle, and comprehensive insurance would have covered the damage to all vehicles.
2020 Kiwi Lifestyle Survey statistics from AAI:
63% of survey respondents who have a licence and drive at least once a week have had an accident while driving
Of those who have had an accident, 65% are aged 15-29, with 18-24-year-olds having the most accidents (35%)
94% of Kiwi drivers agree that it’s important for all drivers on NZ roads to have some form of car insurance, although the proportion of those who strongly agree is significantly down from 83% to 79% since 2019. – 70% of drivers aged 18-29 years strongly agreed that it was important to have insurance cover, compared to 86% of those aged 55+ years
In 2020, AAI surveyed 1,100 regular Kiwis aged 18 years or over about their driving. The maximum margin of error on the total sample of n=1,003 is plus or minus 3 percentage points at the 95% confidence level.
1. Ministry of Social Development. June 2020.
About AA Insurance
AA Insurance is a New Zealand-based joint venture between Vero Insurance New Zealand Limited and the New Zealand Automobile Association Limited ('NZAA'). Vero is owned by Suncorp Group Limited, a listed Australian company. NZAA is an incorporated society that is governed by a National Council and Board. Since 1994 we have provided home, contents and car insurance in New Zealand and in 2018 we introduced small business insurance.
We underwrite our own policies and sell direct to New Zealanders. Our New Zealand-based teams looks after 560,000+ customers with more than 1,100,000 policies. Standard and Poor's (Australia) Pty Ltd has given us an Insurer Financial Strength Rating of AA- (Very Strong).
We are consistently recognised in industry awards and honours. This includes being voted the Reader's Digest Most Trusted General Insurer for 14 years running, named Canstar's 2023-2024 Outstanding Value Award winner for Home and Contents insurance and ranked 6th among 50 of New Zealand's top consumer-facing corporates in the Kantar Corporate Reputation Index in 2024.
Find out more at www.aainsurance.co.nz
For more information please contact:
AA Insurance Media Team
mediacontact@aainsurance.co.nz
