Balancing debt repayments and insurance costs can feel like spinning plates at a circus. One misstep and everything might come crashing down. Ready for the hard truth?
According to the Financial Services Council, only 41% of Kiwi have life insurance, and just 39% have health insurance, leaving many households financially exposed to unexpected shocks. Add in rising natural disasters like floods and cyclones, and it’s clear Kiwi need a safety net now more than ever.
To find practical solutions, we sat down with Christine Liggins, co-founder of Debtfix. Christine has spent years helping Kiwi navigate complex debt problems and shares her expert advice to help you juggle financial pressures with confidence.
Q: Tell us a little about yourself. What inspired you to start Debtfix?
“Debtfix was born in 2017 after I met my co-founder. At the time, he was trying to sell me some software—and it turned into a very expensive coffee for him.”
“We both had over 10 years of experience in insolvency and complex debt, both personal and business, and we saw a gap in the sector.
“With funding cuts driving experienced budget advisors out of work, we positioned ourselves as virtual debt advisers to fill that void. It was about helping people see a path forward when they felt overwhelmed or stuck. Debt doesn’t need to be the end of the road—it can be the beginning of taking back control.”
Q: Why does basic insurance matter when budgets are tight, and how can you manage costs effectively?
“Insurance is often seen as a luxury, but it’s not—it’s a safety net. Claims when you ‘just bump into’ someone else’s car seem to start at $6,000 or more, which can be life-changing if you don’t have any cover. For cars, even basic third-party, fire, and theft insurance can save you from massive unexpected costs. For contents insurance, renters especially underestimate its importance. It’s not the landlord’s house you’re protecting—it’s everything you own inside it.”
Christine suggests breaking things down with these actionable strategies to manage both insurance costs and other priorities:
Check your loan requirements: “If you have a car loan, the lender may require comprehensive insurance. But here’s the thing—you don’t have to take the insurance the lender offers. It’s often more expensive, so shop around for better rates.”
Itemise to prioritise: “With our customers, we do itemise things in the budget, and it’s surprising what you can uncover. When was the last time you checked your power bill, phone plan, or subscriptions? There’s often room to save. For example, we work with an Energy Mate coach who helps people find ways to reduce their power bills. It’s about making sure you’re doing everything you can to cut unnecessary costs.”
Start with the basics: “Basic car insurance and minimum contents insurance are affordable and critical. Think of it as an investment, not just an expense. The cost of a monthly premium can be far less than the financial hit you’d take after an accident or natural disaster.”
Increase your excess: “If your current excess is $250 and you can increase it to $1,000, this will lower your premiums while still keeping your cover intact. It’s a simple strategy that people are often surprised by.”
Understand your policy: “Know whether you’re insured for market value or agreed value. For example, if you bought your car for $20,000 but it’s now only worth $10,000, there’s no point paying for higher coverage.”
Don’t ignore missed payments: “This is a big one. If you miss a few insurance payments, you’re not covered.”
Christine stresses that natural disasters like floods, cyclones, and landslips are becoming more common, catching people off guard.
Editorial note: Recent floods in West Auckland showed just how quickly unexpected disasters can devastate homes. If you’re unsure where to start, tools like Quashed help you compare affordable insurance policies side-by-side.
Q: What are the top mistakes to avoid when managing insurance in New Zealand?
Here are three common mistakes Christine sees people make and how to avoid them:
Thinking missed payments mean you still have coverage: “If you miss payments, you’re not insured anymore. It’s not a debt—it’s a service you pay for.”
Over-insuring assets: “Be realistic about what your car or contents are worth. There’s no point paying for more than their current value.”
Not checking policy details: “Understand the small print. Are you covered for market value or agreed value? If you don’t know, you could be paying too much.”
Q: How can financial mentors help Kiwi manage debt and insurance more effectively?
“Financial mentors can help you prioritise your expenses and find savings you might not see on your own. They’re especially helpful when you feel overwhelmed. Sometimes, just having someone look at your finances with fresh eyes makes all the difference. Mentors can help you find strategies to reduce power bills, restructure payments, or manage your priorities without sacrificing essential cover.” You can find your local financial mentor here.
Q: Why is understanding the relationship between debt and insurance so important?
“When you’re in debt, insurance often feels like an optional expense, but it’s actually a key part of protecting your financial future. Think of it like a seatbelt: if you hit a bump in the road—like a car accident, flood, or unexpected illness—insurance softens the blow.”
“There’s a real need for more affordable, basic insurance packages. Insurers and lenders could also offer better hardship provisions for people struggling to make payments. Partnerships, like those between Good Shepherd and major insurers, are examples of what’s possible—but we need to see more of this.” Debtfix is always looking for collaborative partnerships that can help all New Zealanders.
Christine also suggests insurers adopt clearer, simpler language in their policies to reduce confusion for those under financial stress.
Recap: Christine’s top tips to manage debt and insurance
Itemise to prioritise: Review your spending in detail to afford basic insurance for contents and cars.
Shop around for better insurance rates.
Increase your excess to lower premiums.
Reassess your coverage annually to avoid overpaying.
Final thoughts
Christine’s advice highlights that managing debt and insurance is about balance, planning, and prioritising what matters most. With natural disasters on the rise and financial pressures mounting, even basic insurance can make a world of difference.
Struggling to balance debt and insurance? Start comparing policies with Quashed or contact Debtfix today for tailored support around hardship and debt solution strategies for your needs.
Further reading
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