Consumer group One Big Switch has launched a campaign for compulsory third party motor insurance (CTP) premium relief in order to combat the economic slump caused by COVID-19. The group believes doing so will help reduce the financial impact on households during the crisis by lowering or removing at least one of the bills paid by them.
“We haven’t prescribed how the relief might be delivered or how much,” said Joel Gibson, a spokesman for One Big Switch. “That’s up to state governments to decide and to target accordingly. We’re calling for reductions in car rego and CTP, with the quantum and the targeting to be worked out by governments. It could be a reduction in future fees and premiums for example, proportionate to the drop in the cost of the scheme this year due to less traffic and fewer accidents.
Each state and territory has its own CTP scheme, with premiums collected through vehicle registration fees, and the premiums vary according to the respective jurisdictions.
So far, only Youi has announced a 15 per cent reduction in premiums for car insurance in Australia for three months, while New Zealand insurer Tower is working on a relief programme for drivers there. Tower says its plan, which will centre around refunds, reflects the decline in car usage, which is a result of strict social distancing acts that have been in place since March to slow the spread of the COVID-19 pandemic.