Did you know there are more than 20+ car insurance providers in New Zealand?
Chances are you will only be familiar with a handful of car insurance companies. The well known brands such as AA, AMI, State, Tower are the common ones most Kiwi car owners will know. However, there are many more providers that we will touch on below so you will get to see all the options in New Zealand. We'll also share some tips on what to look out for when it comes to car insurance. This information can help you find the right car insurance for you and it's not just about the price. The cheapest may not necessarily be the one for you. However, the right policy could save you hundreds, if not, thousands of dollars over the years.
Car insurance is not compulsory in New Zealand
Unlike many other developed countries, car insurance is not compulsory in New Zealand.
A survey from 2009 by NZ Transport suggest that only a small number (<10%) of Kiwis are uninsured, however, a more recent survey by research firm Nielsen suggest that only 60%+ of those aged 20 and above have car insurance. For those of you that have had unfortunate accidents with uninsured drivers, the pain and hassle of it may have left a lasting bad taste for this group of drivers.
Do I really need to purchase car insurance or should I risk it
One way to look at this is to ask yourself if it's worth risking spending thousands of dollars to fix and replace your car if you're involved in an accident or will you rather spend some money on paying for insurance without having to worry about it if today was your unlucky day on the road. Remember, even great drivers get into accidents. Or they might be unfortunate to be a not-at-fault party to an accident when a bad driver crashes into you.
Read on to learn more about how car insurance covers you above and beyond just car accidents.
Increasing number of crashes and fatalities on our roads
Looking at statistics on motor vehicle crashes and fatalities from the Ministry of Transport's (MOT) we see an upward trend over the last five years. Figures from 2016 show that there were 286 fatal crashes that year with 328 deaths and almost 10,000 crashes resulting in injuries for more than 12,000 people. New Zealand Herald reported in 2018 that deaths rose 16% to 379 in 2017. In 2019, the provisional number reported on MOT website is 352.
Car accidents are not the only reason to get insured
While accident accounts for most car insurance claims, damages to the vehicle while parked, windscreen damages and thefts are other reasons for car owners to make a claim.
Windscreen damages such as chips or cracks caused by flying stones, rocks and debris while driving on the roads are relatively common. You may have experienced this in recent time. While a relatively quick and easy fix, the cost can set you back anywhere from a couple of hundred for older and common cars to thousands or more for newer cars. Newer cards tend to have more high tech windscreens that can be expensive and time consuming to replace.
Less common, but still a risk, is car thefts. Driven reported earlier this year in January 2020 that Toyota Hilux led the way with the most number of stolen cars in New Zealand at 156. This is followed by the Holden Commodore, Subaru Legacy, Ford Courier and the Subaru Impreza in fifth place. A brand new mid-range Toyota Hilux is worth approximately $40,000.
Factors taken into account when pricing your car insurance
Essentially, most of the questions that are asked when you get a quote for a car insurance policy will feed into the insurer's pricing of your policy.
Here are the commons ones:
Car make and model
Value of the car
Where you park
Drivers profile and history (convictions and claims)
Choices to consider when purchasing car insurance
Check if you're purchasing 3rd Party, 3rd Party, Fire & Theft or Comprehensive cover. Comprehensive is usually the most expensive and it covers the most. The key difference between Comprehensive and 3rd Party (incl. Fire & Theft) is that Comprehensive covers both your own vehicle and the other party that is involved in an accident. 3 Party (incl. Fire & Theft) does not cover the cost of repairing or replacing your own vehicle. It is common to consider 3rd Party covers when the value of your vehicle is not high i.e. older cars that is not worth a lot of money. However, Comprehensive covers sometimes do have other benefits included in the policy that makes it worthwhile such as excess-free covers for windscreen damages or replacement of locks and keys.
The other important thing to note is if the cover you are purchasing is based on Market Value or Agreed Value. Market value means that the insurer will pay you what the car is worth based on roughly what it cost for your car at the time of claim. Agreed Value is a fixed amount that you usually pick upfront when buying the policy. For example, if your car was stolen, Agreed Value policy will pay you out what you had chosen the value to be insured. Market Value on the other hand will mean that you will likely get less than what you paid for the car given it will have lost some value over time.
Excess is another choice you have with car insurance. The default amount is usually $400 or $500 dollars. The higher the excess, the lower your policy cost. However, remember that this is the amount you have to pay when making a claim. Therefore, if you select a higher amount, make sure you will have some money aside for it if/when you do need to make a claim. Typically for drivers that are not on their full license or under a certain age (e.g. 21 years old), a higher excess will apply to them. If your kid is driving your car, remember to add them to the policy. They are at much higher risk of getting into an accident.
Are insurance policies really different across the insurance companies
Most car insurance shoppers look at the price of the policy instead of the benefits. We think it's important to look at the benefits of the policy. They can cover you for quite different things or different amounts of the same thing. For example, some Comprehensive covers may cover you if you lose your car keys. Others may not. An insurer may cover you for your Child Seat. Others may not. An insurer may have included in their cover excess-free windscreen replacement. Others may have this as an option. Looking at the price alone may not result in getting the best value for you.
Below is a full list of car insurance providers in New Zealand. See how many of them you're aware of.
A full list of car insurance providers in New Zealand
Here are some fun facts related to vehicle ownership in New Zealand
The average age of passenger cars in New Zealand is ~14 years old (compared to ~10 years old in Australia) based on 2017 data from MOT
The average price of 91 petrol has risen from about $1.70 to $2.10 in the last five years (~25% increase)
Gaspy is a NZ app that allows you to track where prices are cheapest nearby so you can save a little bit of money
In August 2019, NZ Herald reported that Bay of Plenty was the cheapest region for gas followed by Hawke's Bay, Taranaki, Manawatu-Whanganui, Gisborne and Waikato
On the other hand, West Coast, Queenstown Lakes and South Wairarapa are the most expensive places to fuel up
Speeding fines total more than $240M for Kiwis between March 2019 and March 2020 as reported by Stuff with Canterbury taking top spot
1 in 6 Kiwis are reportedly lying on their car insurance application as published on Stuff, the most common lies are to do with where the vehicle is parked, followed by not listing a driver on the policy and finally under-reporting the distance travelled each year
Car insurance premiums can increase more than 15% in a year so keep an eye on your premiums - Quashed makes it easy for you to manage and track it year on year
Read more about car insurance in our blog post What to expect when shopping for car insurance in New Zealand. We cover how long it takes to get a quote from providers and how much you can save by shopping around.