ACC scraps vehicle risk rating scheme

ACC scraps vehicle risk rating scheme | Insurance Business New Zealand

ACC scraps vehicle risk rating scheme

State insurer, the Accident Compensation Corporation (ACC) has officially scrapped the vehicle risk rating (VRR) component from the ACC motor vehicle levy.

According to the ACC, the VRR programme will be removed, and owners of passenger vehicles will see this change in their vehicle license (rego) from July 01. The changes mean a $28 rego increase for owners of lower-risk (band 3 and 4) vehicles, and a $34 levy drop for higher-risk (band 1 and 2) passenger vehicles.

“The VRR applied different levy rates to different makes and models of cars based on their safety ratings,” ACC explained. “The change to your rego will depend on the risk band of your vehicle.”

Read more: ACC scheme law change passes

The government decided to scrap VRR in December 2018, following a public consultation on ACC levies. At the time, Minister for ACC Ian Lee-Galloway said the scheme had proved challenging for the ACC to administer and lacked evidence that it is contributing to a safer vehicle fleet in New Zealand. Another reason was that it placed a burden on low-income people and families who are generally less able to afford cars with better safety ratings, and so pay a higher VRR levy.

ACC uses the levy collected through the rego and at the petrol pump to fund the cost of treatment and rehabilitation of injuries that occur in motor vehicle accidents on public roads. Last year, the ACC spent $547 million on motor vehicle related injuries.