The Act was drafted so that a vehicle owner cannot easily be uninsured. The insurance is collected at the same counter, at the same time, as the registration, and one cannot be had without the other.
Two routes to a cover
Section 49(1) describes the only two ways a third party cover can be issued:
- In the area of the Central Traffic Registry, the cover is issued by MVIL to the owner when the owner lodges with the Superintendent of Motor Traffic an application for registration or re-registration together with “the appropriate amount of insurance premium”. The Registry collects the premium on MVIL’s behalf.
- In any other area, the cover is issued when the owner obtains from an agent of MVIL a certificate, in a form approved by MVIL, stating that the premium has been paid. The owner then produces that certificate to the registering authority.
Section 50 closes the loop: the Superintendent “shall not register or re-register a motor vehicle” unless, in the Registry area, the premium has been received, or, elsewhere, the agent’s certificate has been produced. Agents must remit what they collect to MVIL at the end of each month or as otherwise agreed (section 36).
A vehicle with a current registration sticker is, by the operation of sections 49 and 50, an insured vehicle. A vehicle whose registration has lapsed by more than 15 days is not. There is no separate third party policy document to lose or forget; the registration record is the record of insurance.
When the cover takes effect, and the grace period
Under section 49(2)(b) the cover becomes effective on the date of registration or re-registration. Under section 49(2)(c) it continues, where the registration is renewed within 15 days of the previous period expiring, until the date of renewal, and otherwise until 15 days after the registration expires. An owner who is a fortnight late renewing is still insured for that fortnight; an owner who is three weeks late is not, and the vehicle becomes an uninsured motor vehicle for the purposes of the Act, with the consequences described in a later article.
Permits, trader’s plates and unregistered vehicles
Section 2 deems a vehicle driven under a permit granted under the traffic legislation, for example to move an unregistered vehicle to a place of inspection, to be registered while it is driven in accordance with the permit, and therefore insured; the Act does not apply if it is driven otherwise than the permit allows. A vehicle carrying a dealer’s trader’s plate is treated as owned by the dealer to whom the plate was issued.
A vehicle that has never been registered is uninsured. The 2021 amendment brought mining, petroleum, logging and agricultural project equipment — haul trucks, dozers, graders, tractors and the like — within the definition of “motor vehicle”, and extended “street” to roads inside project sites and private estates. How such equipment is to be registered and insured is a matter for the traffic legislation and MVIL’s arrangements with operators; the Act itself simply defines the vehicles the scheme covers. See what counts as a motor vehicle.
The owner’s obligations
Section 48(1) requires the owner, “at all times during the registration and renewal of registration”, to keep himself indemnified with MVIL. The penalty for failing to do so is a fine not exceeding K200. The more serious offence is using an uninsured vehicle: under section 59 a person who uses, or causes or permits another to use, an uninsured motor vehicle is liable to a fine of up to K500 or imprisonment for up to 12 months, or both, unless he proves he reasonably believed the vehicle was insured. Under section 63 an owner against whom a claim is made must, on demand, state whether the vehicle was insured; a refusal or a false statement carries a fine of up to K500.
Checking whether another vehicle was insured
An injured person cannot see the other driver’s cover. What they can do is record the registration number, obtain the police road accident report, which records registration and insurance details, and, if the matter is disputed, obtain a search of the Motor Traffic Registry. The Supreme Court in Kuri v Motor Vehicles Insurance Ltd [2011] PGSC 26; SC1117 held that an accident report alone, not sourced from a Registry search, was insufficient once MVIL disputed insurance; in Motor Vehicles Insurance Ltd v Kawage [2014] PGSC 57; SC1362 the same Court held that a certificate is not always required, and that a police officer’s evidence of the insurance details may suffice where MVIL does not effectively rebut it. The topic has its own article: proving the vehicle was insured.
There is no market for compulsory third party cover. Section 72 allows the Minister, on a decision of the National Executive Council, to nominate another company to carry on the business alongside MVIL, but none has been nominated, and section 72(1A) guaranteed MVIL exclusivity for five years after any privatisation. The premium is regulated under the ICCC framework described in who regulates MVIL.
Sources
- Motor Vehicles (Third Party Insurance) Act (Chapter 295) — ss 1, 2, 36, 48, 49, 50, 59, 63, 72. Not on PacLII.
- Motor Vehicles (Third Party Insurance) (Amendment) Act 2021
- Road Traffic Act 2014 — registration of vehicles (replacing the Motor Traffic Act)
- Kuri v Motor Vehicles Insurance Ltd [2011] PGSC 26; SC1117
- Motor Vehicles Insurance Ltd v Kawage [2014] PGSC 57; SC1362
Before relying on anything here, read the current text of the Motor Vehicles (Third Party Insurance) Act (Chapter 295) and check for later amendments. If a decision matters to you, get advice — start with the Office of the Public Solicitor, or find a firm in the law firms directory.