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Key considerations car insurance
Key Considerations with Car Insurance
03 February 2025

Car insurance—it’s one of those things every Kiwi driver has to deal with. In fact, 95% of car owners in New Zealand have their car insured, according to the Financial Services Council. But with premiums climbing and so many providers to choose from, finding the right car insurance in New Zealand can feel like a bit of a mission. In this blog, we break down the key things to consider when choosing car insurance—without the jargon (or insurelingo, if you want to call it that).

Should you even bother with car insurance?

Car insurance might feel like just another expense, but for Kiwi drivers, it’s an essential layer of financial protection. Whether you're cruising in an old car or driving something newer, having the right car insurance can help cover unexpected repair costs or expensive replacements.

Some people consider self-insurance by setting aside money instead of paying premiums. While that might sound smart, it’s not always practical. A major accident or theft could leave you footing a hefty bill, which is why many drivers find comprehensive car insurance provides broad protection, covering anything from minor scrapes to total write-offs, depending on the policy.

Think of it this way: paying monthly premiums is often easier than suddenly having to cover thousands of dollars in damage out of pocket. For many drivers, car insurance acts as a financial safety net, helping to manage unexpected repair costs or replacements.

By comparing car insurance providers, looking at coverage options, costs, and flexibility, you can find a policy that suits both your budget and your car’s needs. Whether you’re searching for the cheapest car insurance or the best balance of affordability and coverage, exploring your options can help you make an informed choice.

Understanding coverage options without the jargon

Choosing car insurance in New Zealand can feel like a guessing game. But don’t worry—we’ll break down your options in plain English so you can make an informed decision without the headache.

  • Comprehensive car insurance: This is the full package. It covers your car, other people's cars, and protects against theft, fire, and even wild weather events. It’s often a suitable option for newer vehicles or cars you couldn’t afford to replace in a hurry.

  • Third-party car insurance: The most basic cover. It protects you if you damage someone else’s vehicle or property, but your own car isn’t covered. This can be a budget-friendly choice for older cars or if you’re confident you can handle repair costs yourself.

  • Third-party, fire and theft: A middle ground between basic and full cover. It includes third-party protection but also covers your car if it’s stolen or damaged by fire. If you want more than just basic cover without the price tag of full comprehensive car insurance, this could be the right fit.

Getting your sum insured right

Once you’ve chosen the right car insurance in NZ, it’s time to make sure your sum insured is spot on. Tools like Trade Me’s car valuation tool can help you figure out what your car is really worth.

Be realistic about your car’s value. A 10-year-old hatchback doesn’t need the same coverage as a brand-new SUV. If you overestimate, you could end up paying too much. If you underestimate, you might be out of pocket when it matters most.

Finding the right car insurance

Picking the right car insurance coverage is only part of the equation. With premiums on the rise, getting a good deal is just as important. Comparing policies can help you find value for money, ensuring you’re covered without overpaying. Keep an eye on your coverage limits and review your policy regularly to make sure it still meets your needs.

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Rising premiums? Here’s what you can do!

Car insurance costs keep creeping up, and it’s not just you—many Kiwis are feeling the pinch. Unfortunately, sticking with the same insurer year after year doesn’t always mean better deals.

So, what can you do?

  • Compare, compare, compare: Shopping around for a car insurance comparison in New Zealand each year can help keep your premiums in check.

  • Negotiate with your current provider: Sometimes, insurers are willing to match a competitor’s offer if you ask.

  • Bundle policies: Combining car and contents insurance might unlock discounts, but always compare them separately to ensure you’re actually saving.

  • Adjust your excess: Increasing your excess could lower your premiums, but make sure it's an amount you can afford to pay if needed.

Let’s look at how adjusting the excess affects insurance costs.

  • Vehicle: Ford Ranger, XLT Double Cab W/S

  • Sum insured: $40,000

  • Driver profile: Female, aged 40, Auckland

  • Policy type: Comprehensive car insurance

Excess

Average Costs (pa)

Savings ($)

$100

$1,797

-

$500

$1,750

$47 (+3%)

$750

$1,611

$186 (+10%)

$1,000

$1,528

$269 (+15%)

$1,500

$1,418

$378 (+21%)

Source: Quashed. Note: Actual costs will vary depending on the insurer, policy coverage, excess levels, and individual risk factors such as age, location, and driving history.

As shown above with our data, changing your excess can result in a saving. However, it’s important to choose an excess amount that fits your financial situation. Remember, you’ll need to cover this cost out-of-pocket when you claim.

Comparing car insurance shouldn’t be hard

Comparing car insurance in New Zealand can feel overwhelming. Jumping from one insurer’s website to another, filling out endless forms, and trying to determine the right car insurance policy—it can be time-consuming.

That’s where Quashed comes in. Instead of spending hours navigating different sites, Quashed lets you compare car insurance in NZ all in one place. You can access real-time car insurance quotes online, get a side-by-side view of policies, and compare perks. The process is quicker and simpler, helping you make an informed decision—without the stress.

What you can do on Quashed

  • Policy type – Want to switch between comprehensive car insurance and third-party cover? No problem. See how your premiums change based on what fits your needs.

  • Excess – Adjust your excess and see how it impacts your monthly premium—simple and transparent.

  • Sum insured – Modify your car’s insured value to ensure adequate coverage without overpaying.

  • Payment frequency – Compare the cost difference between paying monthly or annually and decide what works best for your budget.

To provide additional insights, Quashed includes online review ratings from platforms like Google Reviews, Trustpilot, and Feefo. This helps you see what real customers think about different car insurance providers before making a decision.

With all these tools at your fingertips, making the right choice has never been easier. Whether you're looking for affordability or coverage flexibility, Quashed gives you tools you need to confidently select a policy that works for you.

Smarter car insurance choices with Quashed

Comparing car insurance just got effortless. Join over 45,000 Kiwis already using Quashed to save time and money.

With Quashed, you can compare leading insurers side by side, tweak your coverage in real time, and get an instant quote that fits your budget—all in minutes.

Sign up now and start comparing – it’s quick, easy, and free!

Further reading

Check out these articles to dive deeper into car insurance.

FAQs

General car insurance questions

Why is car insurance so expensive in New Zealand?

Car insurance premiums are rising due to increasing repair costs, inflation, extreme weather events, and higher claims volumes. Congestion and vehicle theft rates also influence pricing.

What does comprehensive car insurance actually cover?

Comprehensive car insurance in NZ typically covers accidental damage to your car and others, theft, vandalism, and natural disasters. Some policies may also include windscreen cover, roadside assistance, and temporary vehicle replacement.

Is agreed value or market value better for my car?

Agreed value provides a fixed payout if your car is written off, offering more certainty. Market value pays what your car is worth at claim time, which may be lower due to depreciation.

Saving on car insurance

How can I save money on car insurance in New Zealand?

You can lower your premiums by:

  • Increasing your excess – Higher excess means lower premiums but more out-of-pocket costs if you claim.

  • Comparing providers regularly – Prices change, so shopping around helps.

  • Bundling policies – Some insurers offer discounts for combining car and home insurance.

  • Choosing a low-mileage policy – If you drive less, some insurers offer lower rates.

  • Improving vehicle security – Installing an alarm or immobiliser can reduce premiums.

  • Paying annually instead of monthly – Some insurers charge extra for monthly payments.

Why does my car insurance go up every year even with no claims?

Premiums rise due to inflation, higher repair costs, and industry-wide claims trends. Insurers adjust prices based on overall risk levels, not just individual claim history.

What should I check before switching car insurers?

Before switching, review:

  • Excess levels – A lower premium may mean a higher excess.

  • Coverage limits – Ensure the policy provides enough protection.

  • Exclusions – Some policies exclude specific events or repairs.

  • Customer service ratings – Check reviews for claim processing reliability.

Comprehensive vs. Third-party insurance

Should I choose third-party or comprehensive insurance?

Comprehensive insurance covers damage to your car and others, making it ideal for newer or high-value cars. Third-party insurance is more cost-effective for older vehicles but only covers damage you cause to others.

How can I avoid being overinsured?

Regularly review your car’s insured value and remove optional extras that you no longer need. Keeping your coverage aligned with your car’s actual worth helps avoid unnecessary costs.

Is there an easy way to compare car insurance providers?

Yes! Quashed allows you to easily compare multiple real-time car insurance quotes online, providing a side-by-side view of your options to help you find the best value.

This article provides general information only and does not constitute insurance or financial advice. Insurance policies vary between providers, and you should check with your insurer or a licensed adviser for guidance specific to your situation. For full details, refer to Quashed’s terms and conditions.

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