gzt: Going by the stupid behavior and lack of following distance on the motorway I've seen today, compulsory car insurance and income protection insurance would not change anything. Some people just believe bad driving is someone else's problem.
My observation on Auckland motorways and roads is that commuting traffic (morning and late afternoon) is very well behaved overall.
Holiday motorway traffic like today actually seems like a different bunch of people in comparison and maybe it is.
(a) shifts the burden off the taxpayers who presently fund the consequences through ACC
(b) places severe financial strictures on drivers if they get caught speeding, get caught drink driving or cause accidents. The net effect is that people simply cannot afford the consequences of those things (which might raise insurance premiums to over $5,000 a year) so a significant majority will modify their behaviour accordingly.
(c) It seriously penalises, and thus tends to prevent, new drivers in fast and/or expensive cars, restricting most to cars of 1 litre or smaller for at least their first 5 years on the road. This tends to help reduce the idiot behaviour of a 16 year old in a Subaru WRX because he simply can't insure it and allows new drivers time to get experience
NPR (Number Plate Recognition) cameras would easily be able to tell authorities which cars were insured and which were not. No insurance, fine and impound for first offence. Ban driver and crush vehicle for second.