Editorial: ACC options deserve to be considered

File photo / Alan Gibson

Every day, people make decisions on the extent and scope of their insurance cover. Should the car have a comprehensive policy or just third party?

For how much should they insure the house and its contents? Obviously, it is sensible to be insured in some shape or form, but the degree of cover will depend on various factors, not least people's assessment of the risk to their property.

Other spending priorities may be a further influence, especially when times are tough.

Taking all this into account, people make their decisions. Why should they not also be offered some scope when it comes to the accident insurance levy they pay?

That is a question posed by a consultation paper on next year's Accident Compensation Corporation levies. It suggests taxpayers might pay a lower levy in exchange for accepting lower compensation, longer waits and higher medical fees after an accident.

Those reduced benefits could include a 10 per cent drop in compensation for lost income after a less serious injury, such as a sprained ankle, and lower levies in return for a longer wait period for lost income compensation, from a week to perhaps three weeks.

Lower levies could also be charged if taxpayers paid more of their own accident-related treatment costs.

The idea of giving taxpayers an option of paying lower levels for reduced service - or higher levies for better service - is already part of the ACC system.

It is in line with an existing Cover-Plus scheme for the self-employed, who can pay levies based on a nominated income, even if their incomes fluctuate wildly. That ensures they are compensated after an accident at 80 per cent of the income they choose.

It is worthy that fresh ideas are being brought to the table in an effort to improve the ACC service and the choices for taxpayers.

But the Government is likely to face opposition on several fronts if it elects to pursue such a radical suggestion. Some would question whether the take-up of a lower levy would be enough to justify the exercise.

The amount of paperwork would certainly increase and the buy-in would have to be sufficient to make that expense worthwhile.

Others would worry more about too extensive a take-up.

They would predict that people on low wages with other pressing spending priorities would find the lure of lower levies too hard to resist, and would take this cost-cutting step without accurately analysing the potential repercussions.

Such critics would suggest, further, that introducing such a measure as the country struggles out of a recession is ill-conceived.

The consultation paper also suggests including high levies for those who had more injuries because of the sport they play.

The ACC Minister, Nick Smith, has already expressed misgivings about this. He did not, he said, want to harm the "broader social benefits" of sport. It seems unlikely many people would be deterred from playing sport for that reason. Nonetheless, this is one aspect of the document that seems highly unlikely to be adopted.

The ACC system is being finessed in many respects. Flexible thinking has led this year to it being given the power to vary levies on employers in line with their accident records.

The suggestion that people could be given more choice about the insurance they take for non-work accidents indicates a similar tack. It is worth serious consideration. This would not result in accident victims being set adrift, as would happen if an uninsured house is destroyed.

They would continue to have their rehabilitation provided for, and would receive fair and reasonable compensation, as envisaged by the system's founders in the early 1970s.

Taxpayers, as in other areas of their lives, would simply have some ability to tailor their insurance cover to their own circumstances.