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The Great Compulsory Third Party Swindle?

By Squil - 21 November 2008 49

Having moved from NSW recently I felt the gross indignation that other Canberran’s have on learning that the NRMA exercises a monopoly on ACT CTP insurance. Having through no fault of my own been born a male in 1982, I am (despite a spotless 8 year driving record) demanded to pay the highest insurance premiums because of my age and penis.

Well I was planning on giving the finger to the man by keeping the car registered in NSW at an alternative address and getting the most competitive NSW CTP I could… until I did the sums.

For me, and my 1996 Mazda sedan I pay $608.35 for registration including CTPI in the ACT.

In NSW, an NRMA CTP Greenslip costs me $628.76 PLUS registration fee of $218 = $846.76

For comparison, a 50 year old driver with the same car and spotless driving record as myself pays $462.74 for their NSW CTP.

So I “save” $238.41 that the NRMA would otherwise have bent me over and removed.

So long live the monopoly! It seems the ACT monopoly that the NRMA enjoys also provides a benefit to those the insurance company views as “high risk”.

So finally, one piece of consolation and respite for a 26 year old male driver living in Canberra who feels there are no rewards for driving responsibly (I gave up on comprehensive insurance this year, putting my money where my mouth is, feeling that if the insurance companies wouldn’t gamble on my clean driving record for less than a ridiculous $1200 I’d take the risk).

What’s Your opinion?


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49 Responses to
The Great Compulsory Third Party Swindle?
VYBerlinaV8_the_one_ 1:36 pm 21 Nov 08

Oh, and you also don’t get any surety that the registered vehicles on the road meet any sort of reasonable safety standard (ie brakes, lights work, tyre condition, structural rust, etc).

VYBerlinaV8_the_one_ 1:32 pm 21 Nov 08

Squil – I got this level of pricing because I am a long term (about 15 years) continuous customer of NRMA (for comprehensive car, 3rd party personal and home contents), and despite having a couple of accidents many years ago, now carry the largest available no claim bonus. I have my other car insured with AAMI (also at full no claim bonus), and similarly split my house and contents across the two insurers. I’ve also been an NRMA member since I was 16 (when I bought my first car). Because of the long history, and the no claim bonus, they give me a 3rd party personal insurance rate of about 280 bucks a year. Add the 250 or so bucks the RTA charges, plus 30 bucks for a yearly inspection, and rego works out at about 560 a year.

It still costs, but my frank opinion is that Canberrans are getting really ripped off with their rego arrangement.

johnboy 1:21 pm 21 Nov 08

GB said :

So, is it because insurance claims are higher in NSW; or did the ACT government use its market power (sole purchaser) to get a better deal from NRMA than the free (ish) market in NSW? Or something else?

What about the idea that if you haven’t had an accident in the first x years of driving then your probability of having an accident in subsequent years drops substantially regardless of age or gender? True or false?

Any insurance experts out there? Any data?

I’m pretty sure a bloke from the RTA told me last year that if you’re involved in any sort of bingle (including a paint scraper in the car park) your chances of being in a fatal accident in the next year double.

(before anyone panics that’s a low chance doubling to a still low chance, it doesn’t mean you’re 50-50 to make it through the year)

Squil 1:15 pm 21 Nov 08

tylersmayhem said :

What’s being white got to do with it again?

Nothing. Ignore.

Squil 1:14 pm 21 Nov 08

Mr V8: Can you illuminate me (and us all) as to how I might be able to access a similarly low fee?

tylersmayhem 1:11 pm 21 Nov 08

You’re right, I’m not complaining about being young, white and male.

What’s being white got to do with it again?

Back on topic: when I registered my car in the ACT earlier in the year, the person at the rego office said that later in the year Canberran’s will be able to choose who they use for CTP insurance. I understood this as NRMA no longer hold the monopoly, and punters can now seek competitive quotes? Has anyone else heard this?

VYBerlinaV8_the_one_ 1:11 pm 21 Nov 08

Ha! Even when I was still in my 20’s, had multiple speeding tickets as a younger man and was driving a nearly new (and modified) V8, my third party insurance and rego combined was only about $550! And guess what, it still is!

God bless NSW!

gertel 1:07 pm 21 Nov 08

I think some of what we pay is actually paying for other bad drivers. I suspect some drivers claim more than they ever pay in premiums.

I’ve never had an at-fault accident but last year someone drove up the back of our car – they were driving an unregistered vehicle and also about to leave the ACT for QLD. We supplied the drivers details to AAMI and they paid to have our car fixed – we didn’t pay an excess because we could name the driver but they (AAMI) may never have tracked down the driver who hit us. So I think the cost of a car’s parts would also come into it.

nomnomnom 12:49 pm 21 Nov 08

The system in NSW is, at best, an oligopoly.

If you go to every registered CTP insurance provider with the same details their quotes won’t vary by more than $5. Its a joke and clearly non-competitive.

The system here is much better!

Squil 12:28 pm 21 Nov 08

At the very least there must be an inverse relationship between time since last at fault accident and probability of causing an accident.

Anyone here an actuary?

Anyone here a statistics major and want to do the math to support a submission to the Government and insurance ombudsmen? 🙂

GB 12:22 pm 21 Nov 08

So, is it because insurance claims are higher in NSW; or did the ACT government use its market power (sole purchaser) to get a better deal from NRMA than the free (ish) market in NSW? Or something else?

What about the idea that if you haven’t had an accident in the first x years of driving then your probability of having an accident in subsequent years drops substantially regardless of age or gender? True or false?

Any insurance experts out there? Any data?

Squil 12:14 pm 21 Nov 08

You’re right, I’m not complaining about being young, white and male. I’m certainly not hard done by.

Regardless of genitalia or birth date insurance should be weighted most heavily to driving record after a certain amount of time behind the wheel. Certainly driving history would be the best indicator of a driver’s risk of having another accident but insurance companies prefer to generalize with little regard for individual driving history.

I agree that young males should have to pay higher insurance when they receive their licenses because they obviously represent a higher risk category. But I’m sure the statistics would show that if you haven’t had an accident in the FIRST TWO YEARS of driving then your probability of having an accident in subsequent years must drop substantially regardless of age or gender.

There are NO rewards for driving responsibly. And don’t talk to me about no claim bonus, that only rewards you for not using your insurance. I lost that because of an act of vandalism while parked at Westfield Belco.

Holden Caulfield 12:04 pm 21 Nov 08

I am (despite a spotless 8 year driving record) demanded to pay the highest insurance premiums because of my age and penis.

This is an old bugbear of mine too. I wonder, are there are “legitimate” services in which females are subjected to higher pricing? What about a gym in which females are prohibited from joining. Yes, I know there have been clubs or varying description in which men only could join, and I think their bunk too.

I know, by and large, men have it far better in our society, so I see these observations as a bit cute, rather than anything too serious.

fnaah 11:58 am 21 Nov 08

Ah, 96 mazda. Nevermind.

Crazy!

fnaah 11:57 am 21 Nov 08

You’re over 25 with a clean record and NRMA still want $1200 for comprehensive?

What sort of car do you drive?

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