Uninsured drivers rack up millions in debt

Uninsured drivers are racking up millions of dollars in debt from crashes each year, according to AA Insurance data.

In the 12 months to the end of August, AA Insurance handled $5.8 million of claims involving around 2,330 uninsured drivers considered to be at fault in accidents with customers.

AA Insurance recently had several claims where drivers at fault had to pay large sums of money because they were uninsured. One example was a student who caused $60,000 worth of damage when his car hit a Lexus. In another, an uninsured women lost control of her vehicle and drove through a fence, then the lounge wall of a house. She is now paying off a debt of around $75,000, which doesn’t include the cost of repairing her own car.

“These kinds of situations can be easily avoided,” says Suzanne Wolton, Head of Customer Relations, AA Insurance. “When you consider the average annual premium for third party insurance with us is about $200 a year and the average claim is more than 12 times that, it makes sense to protect yourself from what could be a lifetime of debt.”

One AA Insurance customer took out third party insurance only a week before causing over $200,000 worth of damage to a truck and trailer. The young male driver was merging lanes when his vehicle clipped the truck and trailer, causing it to tip and lose its load. The driver’s car then spun out and hit a power transformer. Without third party insurance this driver would be lumbered with considerable long term debt.

“It’s important for drivers to consider the implications of having a car on the road without insurance,” says Suzanne. “If a driver doesn’t have insurance, but damages someone else’s car and it’s their fault then they will have to pay for it themselves, either as a lump sum or over a long period of time. We still have about 30 drivers on our books who have been paying off their debt since the 1990s.

“If price is an issue, then third party insurance which, at around $4 a week is less than a cup of coffee, can be a great option as at least it will cover you for the damage you might do to other people’s property. A large debt may also affect your credit rating.”

There is also the time and cost involved in repairing or replacing your own vehicle to consider.

“Insurance companies have dedicated and experienced people to deal with the hassle a car accident can result in, so customers don’t have to,” says Suzanne. “However if you don’t have insurance you will be the one to have to deal with repairs, liability, negotiations and disputes on your own.”

What to do in the event of an accident:

• Check that everybody involved in the collision is okay and call the emergency services if necessary
• Don’t try to settle the claim yourself – leave it to your insurer
• Keep a pen and paper in the car for writing down details
• Take a picture of the scene with a camera or your phone
• Make sure you get the other driver’s correct registration number, name and contact number or address details
• Contact your insurer and provide as much information as you can.

About AA Insurance

AA Insurance was launched in 1994 and is a joint venture between New Zealand Automobile Association and Suncorp-Metway Limited.

AA Insurance employs around 580 staff servicing more than 280,000 customers and manages over 500,000 policies covering motor, home and contents insurance.

AA Insurance was named as New Zealand’s best workplace at the 2011 JRA Best Workplaces Survey, winning the overall award and the large company category.  From 2008 to 2012 AA Insurance has consistently been a finalist in the medium-large workplace category.

AA Insurance was also named winner of the 2012 New Zealand Insurance Industry Awards for Direct Insurance Company of the Year, as well as voted Most Trusted Insurer by New Zealanders in the Insurance Providers category of the 2012 Reader’s Digest Most Trusted Brands survey, conducted by Catalyst Research.

AA Insurance Limited has an A+ (Strong) Insurer Financial Strength Rating given by Standard and Poor’s (Australia) Pty Ltd.  For further information visit www.aainsurance.co.nz.

AA Insurance is proud to support youth charity Blue Light as its principle corporate sponsor.