Being hit by an uninsured driver in New Zealand can be a frustrating and financially stressful experience. While New Zealand boasts a relatively high rate of insurance coverage among vehicle owners, uninsured drivers do exist, and understanding your options when they cause an accident is crucial. Your ability to recoup costs for vehicle damages, medical expenses, and other related losses hinges on your own insurance policy and the specific circumstances of the accident.
Understanding the Risks: Uninsured Drivers on NZ Roads
Although New Zealand doesn’t have exact figures readily available on the percentage of uninsured drivers, anecdotal evidence from insurance companies and industry professionals suggests it’s a persistent problem, particularly among younger drivers and those in lower socioeconomic areas. Driving without insurance is illegal in New Zealand, and drivers caught doing so can face fines and demerit points. However, this doesn’t eliminate the risk of encountering an uninsured driver. The Motor Vehicle Insurance (MVA) Levy, which is included in your vehicle registration fee, provides some cover for personal injury caused by uninsured drivers through the Accident Compensation Corporation (ACC), but it does not cover property damage to your vehicle.
Your Car Insurance Policy: Your First Line of Defense
Your car insurance policy plays a vital role when dealing with an uninsured driver. Several types of coverage can provide financial protection.
Comprehensive Insurance: This is the most extensive level of coverage. It typically covers damage to your vehicle regardless of who is at fault. This means that even if an uninsured driver hits you, your comprehensive policy will cover the costs of repairing or replacing your vehicle, subject to your excess. While you’ll still need to pay your excess, you won’t be left footing the entire bill. The specifics of what’s covered can vary between policies, so it’s important to carefully review the policy wording. For example, some policies may offer a “no-claim bonus protection” which means you won’t lost it, even if you claim for an accident that wasn’t your fault. Others may include cover for towing, accommodation, or rental car costs if your vehicle is undrivable after the accident.
Third Party, Fire & Theft Insurance: This offers a middle ground between Comprehensive and Third-Party Only. It covers damage to other vehicles if it is your fault. Crucially, it doesn’t cover damage to your vehicle if you’re hit by an uninsured driver. If you opt for this type of insurance, you would need to pursue the uninsured driver directly to recover your costs, which could be difficult. It does, however, cover your vehicle if it’s damaged by fire or stolen, even if the culprit is never found.
Third Party Only Insurance: This is the most basic level of coverage. It only covers damage you cause to other people’s vehicles or property. It provides no protection for your vehicle if damaged by an uninsured driver, or if it as a result of your own mistake. In this scenario, you would be required to pursue the uninsured driver directly for your costs.
What Happens if You’re Hit by an Uninsured Driver? Step-by-Step Guide
- Ensure Safety and Call Emergency Services: First and foremost, prioritize safety. Check yourself and any passengers for injuries. If anyone is injured or the accident is causing a traffic hazard, call 111 immediately for police and ambulance assistance.
- Gather Information: If it’s safe to do so, exchange information with the other driver. This includes their name, address, phone number, and vehicle registration number. Even if they admit to being uninsured, obtain this information. The police will also take down these details when they attend the scene.
- Document the Scene: Take photos of the damage to both vehicles, the accident scene, and any relevant details like road markings or signage. These photos can be invaluable when filing an insurance claim or pursuing the uninsured driver for damages.
- Report the Accident to the Police: In New Zealand, you must report any accident to the police if someone is injured, damage exceeds a certain amount (currently $5,000), or if the other driver fails to provide their details. Even if the damage is minor and everyone is okay, it’s still a good idea to report the accident, especially if the other driver is uninsured. The police report will be a valuable piece of evidence for your insurance claim.
- Contact Your Insurance Company Immediately: Promptly notify your insurance company about the accident. Provide them with all the information you’ve gathered, including the police report, photos, and details of the uninsured driver. Your insurance company will guide you through the claims process and explain your options.
- Claims Process:
- If you have Comprehensive Insurance: Your insurance company will typically handle the repairs to your vehicle (or provide a payout if it’s written off), minus your excess. They may then attempt to recover the costs from the uninsured driver.
- If you have Third Party, Fire & Theft or Third Party Only Insurance: You will need to pursue the uninsured driver directly to recover the costs of repairing your vehicle. This can be a complex and time-consuming process, potentially requiring legal action.
Pursuing the Uninsured Driver Directly
If you only have Third Party Only or Third Party, Fire & Theft insurance (or no insurance at all), you’ll need to take steps to try and recover the costs of your car damage from the driver who caused the accident. This can be challenging: if they can’t afford insurance, they may not have the financial means to pay for substantial repairs, either.
Demanding Payment: The first step is to send a formal letter to the uninsured driver demanding payment for the damages to your vehicle. This letter should include a detailed breakdown of the costs (e.g., repair quotes, towing fees) and a clear deadline for payment. It’s advisable to send the letter via registered mail so you have proof that it was received. You might need to consult with a lawyer on this, even if only briefly, to ensure the letter meets all legal requirements.
Mediation: If the driver refuses to pay, consider mediation. Mediation is a voluntary process where a neutral third party (the mediator) helps you and the other driver reach a mutually acceptable agreement. It’s often a less expensive and time-consuming alternative to going to court.
Filing a Claim in the Disputes Tribunal: If mediation fails, you can file a claim in the Disputes Tribunal. The Disputes Tribunal can hear claims up to $30,000. The process is relatively informal and designed to be accessible to people without lawyers. You’ll need to present evidence to support your claim, such as repair quotes, photos of the damage, and the police report.
Remember, you bear the burden of proving that the uninsured driver was at fault and caused the damage to your vehicle.
Winning your case does not guarantee you will get the money. Enforcing judgement against an uninsured person can be extremely difficult as they may have no attachable assets.
Enforcement: Even if you win in the Disputes Tribunal, getting the uninsured driver to pay can still be a challenge. You may need to take further action to enforce the judgment, such as applying for an attachment order to seize their wages or assets. Be aware that this process can be complex and may require legal assistance. Weigh up the cost of pursuing the debt against the potential recover, as you don’t want to throw good money after bad.
The Role of ACC and Personal Injury
The Accident Compensation Corporation (ACC) provides no-fault personal injury cover to everyone in New Zealand, regardless of who caused the accident. This means that if you (or your passengers) sustain injuries in an accident involving an uninsured driver, ACC will cover your medical expenses, rehabilitation costs, and potentially lost income. ACC coverage is funded through levies, including the Motor Vehicle Insurance Levy paid as part of your vehicle registration. Applying for ACC compensation involves completing a claim form and providing medical evidence to support your claim. While ACC covers personal injuries, it does not cover damage to your vehicle or other property.
The Importance of Uninsured Driver Protection (if available)
Some insurance companies in New Zealand offer “uninsured driver protection” as an optional add-on to their Comprehensive policies. This add-on waives your excess if you’re hit by an uninsured driver and aren’t at fault. It can provide peace of mind knowing that you won’t have to pay your excess in this situation.
Case Studies
Case Study 1: The Comprehensive Coverage Advantage
Sarah was driving home from work when an uninsured driver ran a red light and collided with her car. Sarah had comprehensive insurance. She immediately reported the accident to the police and her insurance company. Her insurance company organised for her car to be towed by one of their preferred panelbeaters. Once they assessed the accident and damage, she paid the excess on her policy and shortly after, her car was repaired. Meanwhile, Sarah’s insurance company explored ways to recover the money they paid out to her from the uninsured person.
Case Study 2: The Third Party Only Struggle
John was rear-ended by an uninsured driver while waiting at a traffic light. John only had Third Party Only insurance. He exchanged details with the uninsured driver, however the driver was unemployed and did not have any assets. John faced the challenging task of pursuing the negligent driver directly to recover the costs of repairing his car. After unsuccessfully trying to negotiate with the uninsured driver, John eventually filed a claim in the Disputes Tribunal. He won his case, but has not managed to see any of his lost costs, as the person who was negligent has no money to pay with.
Tips for Choosing Car Insurance in New Zealand
Choosing the right car insurance policy is essential for protecting yourself financially in case of an accident involving an uninsured driver. Here are some tips to consider:
- Assess Your Needs: Consider the value of your car, your financial situation, and your risk tolerance. If you have a newer or more expensive vehicle, comprehensive insurance is generally recommended. If you have an older car and are on a tight budget, Third Party, Fire & Theft or Third Party Only insurance may be more suitable, but be aware of the risks.
- Compare Quotes: Don’t settle for the first quote you receive. Shop around and compare quotes from multiple insurance companies. Online comparison tools can make this process easier. Look beyond just the price and consider the coverage offered, the excess, and any additional benefits.
- Understand the Policy Wording: Carefully read and understand the policy wording before you sign up. Pay attention to any exclusions or limitations. If you have any questions, don’t hesitate to ask the insurance company for clarification.
- Consider Uninsured Driver Protection: If it’s available, consider adding uninsured driver protection to your comprehensive policy. This can provide peace of mind knowing that you won’t have to pay your excess if you’re hit by an uninsured driver.
- Increase Your Excess (Carefully): Increasing your excess can lower your premium, but be sure you can afford to pay the higher excess if you need to make a claim.
- Bundle Your Insurance: Some insurance companies offer discounts if you bundle your car insurance with other policies, such as home or contents insurance.
- Review Annually: Review your car insurance policy annually to ensure it still meets your needs and that you’re getting the best possible deal.
Minimising The Risks
Whilst an accident can happen at any time. You can minimise your chance of being the victim of an uninsured driver.
Here are some tips:
- Always drive defensively.
- Be aware of your surroundings.
- Avoid driving in high-risk areas when possible.
- Ensure the indicators use are used when required.
- Check your blindspots.
- Pay attention to the traffic around you.
Common Questions About Uninsured Drivers: FAQs
What happens if an uninsured driver hits my parked car?
If an uninsured driver hits your parked car and leaves the scene, it is often called a ‘hit-and-run’. You should report the incident to the police, as they will start an investigation. If you have comprehensive insurance, your insurer will likely cover the repairs, minus the excess. If not, you’ll need to try and identify the driver yourself – and then attempt to recover the costs from them directly. Any security footage or eye-witnesses will be extremely important in this situation.
Unfortunately, if you are unable to find out who caused the accident, you may not be able to recover costs associated with repairing the damage to your vehicle.
Will my insurance premiums increase if I make a claim after being hit by an uninsured driver?
If you have comprehensive insurance and aren’t at fault in the accident, your insurance premiums shouldn’t increase when you make a claim. Many insurers offer a “no-fault” guarantee, which means your premiums won’t be affected if the accident wasn’t your fault. However, it’s always best to check with your insurance company to confirm their policy on this.
Can I sue an uninsured driver for damages?
Yes, you can sue an uninsured driver for damages to your vehicle and other associated costs (e.g., towing fees, rental car expenses). However, you’ll need to prove that the uninsured driver was at fault in the accident. Winning a legal case against an uninsured driver doesn’t guarantee that you’ll recover all your costs. They may not have the assets to pay the judgment or the means to earn an income to pay in instalments which can make it extremely difficult to recover money.
Always seek legal advice when exploring this option.
Is it worth getting legal help after being hit by an uninsured driver?
Whether it’s worth getting legal help depends on the complexity of the situation and the amount of damages involved. If the accident was relatively straightforward and the damages are minor, you may be able to handle the claim yourself. However, if the accident was complex, if you sustained significant injuries, or if the uninsured driver is refusing to cooperate, seeking legal advice is advisable. A lawyer can advise you on your legal rights and options and help you navigate the claims process.
What is excess?
An excess is the amount you’ll need to pay when you make a claim. By paying this excess, it will commence the repairs being arranged.
References
- Accident Compensation Corporation (ACC): acc.co.nz
- Disputes Tribunal: Disputes Tribunal
- New Zealand Police: police.govt.nz
Don’t leave yourself vulnerable to the financial consequences of an accident with an uninsured driver. Review your car insurance policy today and ensure you have adequate coverage to protect yourself and your vehicle. Compare quotes to ensure you are paying a competitive price without sacrificing coverage. Peace of mind on the road is an investment worth making. Get a free car insurance quote now and secure your financial future.
