Choosing car insurance in New Zealand can feel overwhelming. Premiums have risen by 18.1% over the past year, with the average comprehensive policy now costing $1,346. Each insurer offers different policies and communicates differently, which can make it harder to find the right fit.
With prices rising and so many options, finding cover that suits your budget is more important than ever. This guide will walk you through what to consider when choosing a car insurer, helping you make the best decision for your needs.
Third-party vs comprehensive: what’s best for you?
When deciding between third-party and comprehensive car insurance, the right choice depends on your car’s value, how you use it, and the level of protection you need. Here’s a closer look at each option to help you decide which is best for you:
Comprehensive car insurance
Ideal for newer or high-value cars: Comprehensive insurance is generally the best choice if your car is newer or has a high value. It provides broad protection for your vehicle, covering damages even if you’re at fault.
Protection against natural disasters and theft: This type of insurance typically includes cover for risks like theft, fire, vandalism, and certain natural disasters, such as floods or storms.
Full cover for vehicle and property damage: Comprehensive policies cover damage to both your vehicle and other vehicles or property involved in an accident.
Third-Party insurance
Suitable for older or lower-value cars: Third-party insurance can be a more economical choice if you drive an older car with a lower market value. In cases where repair costs could exceed the car’s worth, this option provides basic protection.
Covers damage to others’ property: While it doesn’t cover damage to your own vehicle, third-party insurance covers damage you may cause to other people’s property or vehicles.
Lower premiums, lower protection: This is a more budget-friendly option, but keep in mind that it won’t protect you against losses from theft, vandalism, or natural disasters.
For a more detailed policy comparison on these cover types, check out our Motor Insurance NZ Guide.
Assess your budget and cost-saving options
Comprehensive car insurance costs more but provides broader cover. It’s a solid choice if your car is valuable, and the cost of repairs would be high. Here are some ways to save on premiums while maintaining solid cover:
Increase your excess: Opting for a higher excess (the amount you pay out-of-pocket in a claim) can lower your monthly premium. With Quashed, you can adjust your excess setting and instantly see the savings. To find out more, read our blog on Smart Ways to Slash your Car Insurance Costs.
Bundle policies: If you already have home or contents insurance, bundling your car insurance with the same provider may offer multi-policy discounts. Bundling can be an effective way to save money and simplify your insurance management but it does have its drawbacks as we outlined in a previous blog.
Driver safety incentives: Some insurers reward safe driving with lower premiums, which can be beneficial for younger drivers or those looking to control costs.
Think about how often you drive
If you’re frequently on the road, the risk of accidents is higher, making comprehensive coverage a safer choice for full protection. However, if you don’t drive often, a third-party policy might be a better fit, especially if the car’s value doesn’t justify paying for comprehensive insurance.
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How much does it cost to insure a car in NZ?
Car insurance costs in New Zealand have risen considerably, and it's more important than ever to compare options. With the Quashed comparison tool, you can easily compare top NZ insurers like Protecta, AMP, AA, Tower, and TradeMe, on the price, benefits and extras they offer. For example, did you know that some policies cover excess-free windscreen repairs, while others offer free rental car coverage if your car is stolen?
Quashed breaks down each policy feature—from coverage limits on lost keys to accommodation and personal injury protection—so you know exactly what you’re paying for.
For more details on average car insurance costs, check out our blog.
What’s included in your car insurance?
When choosing car insurance, it’s essential to look beyond the price and consider what each policy actually covers. Here are some key features to look for:
Offers and discounts: Many insurers provide incentives to reduce premiums.
Damage to car: Comprehensive policies generally cover damage to your car, while third-party cover only includes damage to others.
Windscreen/glass cover: Useful if you frequently travel in areas with large vehicles or high traffic.
Roadside assistance: Essential for those driving regularly, especially in rural or remote areas.
Lost/stolen keys: Valuable if you frequently travel with or park your car in public places.
Trailer cover: Important if you often tow a trailer, ensuring it’s included in your policy cover.
Rental car cover: Convenient if your car is stolen or requires extensive repairs.
Each insurer’s offering is unique, so having a clear view of these features helps ensure you’re not missing anything essential in real-life situations.
For a guide on avoiding common pitfalls, read our guide on the Top Ten Insurance Mistakes That Cost You Money.
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Car insurance for seniors and young drivers in NZ: special considerations
Insurance costs vary significantly across age groups, so it's essential to understand what each group might expect:
Young drivers: Inexperienced drivers, particularly those under 25, often face higher risk ratings, which can lead to added costs or specific limitations in cover. Some insurers add additional excess fees for younger drivers, ranging from $250 for those licensed less than two years to as high as $500 for drivers under 25.
Seniors: Seniors generally have lower accident rates and therefore enjoy lower premiums. However, average premiums have still risen, making it essential to shop smart and select senior-friendly policies that match their driving habits.
Quashed provides a clear view of options and any potential additional fees, helping you make an informed choice.
For more money saving tips, check out our blog on Smart Ways to Slash Your Car Insurance.
How reliable is your insurance provider?
Reliability is crucial when choosing an insurer. To assess this, consider two key indicators:
Financial strength ratings: These ratings reflect an insurer's ability to pay claims, even under pressure. Quashed provides updated financial strength ratings for trusted NZ insurers like AMP, Protecta, and Tower, helping you choose a provider that’s well-prepared for the long haul.
Customer reviews: Real-world insights from other Kiwis provide valuable context on what you can expect—from claim response times to overall service quality. Quashed compiles reviews from Google, Feefo, and Trustpilot, giving you an informed and balanced view before you commit.
Kiwis value transparency—knowing that their insurer can deliver financially and provide quality service. Quashed combines both financial ratings and real customer experiences, saving you time and offering clarity.
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Ready to find the right car insurance?
Don’t leave your insurance decisions to chance. With Quashed, you can quickly compare policies from top NZ insurers—all in one place. Whether you’re looking for comprehensive cover, a budget-friendly third-party policy, or just want to see the benefits each option offers, our tool makes it easy.
FAQs
Why is car insurance so expensive in New Zealand?
Car insurance premiums in New Zealand have been steadily rising, leaving many Kiwis wondering why. The main factors contributing to the increased cost include inflation, the growing frequency of extreme weather events, and higher repair costs for modern vehicles with advanced technology. Insurers also adjust premiums based on claim trends, which have been rising due to factors like increased vehicle values and congestion in high-traffic areas.
What does comprehensive car insurance cover in New Zealand?
Comprehensive car insurance offers the broadest protection, covering damage to your car and others’ vehicles in the event of an accident, even if you're at fault. It also includes cover against theft, vandalism, and certain natural disasters like floods and hail. Additional benefits may include glass cover and roadside assistance, making it an attractive choice for those with newer or high-value cars.
How can I save money on car insurance in NZ?
There are several ways to save on car insurance in New Zealand. Consider increasing your excess, bundling policies if you already have home or contents insurance, or taking advantage of safe driver discounts. Regularly comparing providers and policies can also help you find competitive rates and avoid paying more than necessary.
Got more questions about car insurance? You’ll find all the answers right here.
