Car insurance in New Zealand can be a bit of a challenge. With premiums on the rise, many of us are looking for affordable car insurance options. Finding the right insurance provider, whether it’s Tower, AA, or Cove, is crucial for your finances and peace of mind. This guide breaks down the basics of car (or motor) insurance in New Zealand..
With this guide, you'll learn about motor insurance policies, coverage options, and tips to save on your premiums. We’ll provide practical insights, key factors to consider, and essential details to help you make informed choices.
What is motor insurance? And why is it important?
Motor insurance in New Zealand provides essential coverage for accidents, theft, fire, and natural disasters. While not mandatory, having the right insurance is crucial, as accidents can lead to high costs without adequate cover. Comprehensive car insurance offers extensive protection against damage, theft, fire, and vandalism, and allows customers to choose either market value or an agreed value.
Types of motor insurance
There are different types of motor insurance policies to fit various needs and budgets.
Third-party car insurance: Covers damage you might cause to other people's property or vehicles. However, it does not cover damage to your own vehicle.
Third-party, fire, and theft insurance: This covers damage caused to other people's property or vehicles and provides protection if your car is stolen or damaged by fire. However, it won’t cover repairs to your own car if you’re at fault in an accident.
Comprehensive car insurance: Covers damage to your own vehicle from accidents, fire, theft, vandalism, natural disasters, and more. It also includes the benefits of third-party, fire, and theft cover.
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How much does car insurance cost in NZ?
The average annual cost for comprehensive car insurance in New Zealand was $1,346 by the end of September 2024, equivalent to $112 per month. Average premiums are presented below.
Yearly $ | Monthly $ | |
|---|---|---|
National | $1,346 | $112 |
Auckland | $1,579 | $132 |
Canterbury | $1,254 | $105 |
Wellington | $1,193 | $99 |
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What determines the cost of car insurance?
Here are some main factors that influence car insurance premiums:
Age: Young drivers, especially those under 25, usually pay more because they have a higher chance of getting into accidents. Our data shows this clearly. By the end of June 2024, the average yearly cost for comprehensive car insurance for people aged 18 to 24 was $1,735. In contrast, for drivers aged between 40 and 50, the average was $1,240.
Vehicle make and model: One of the main things that influence your insurance premium is the make and model of your car. Insurance companies consider its value, safety features, repair costs, and how often it gets stolen. High-performance cars or those more likely to be stolen usually have higher premiums.
Where you live: Did you know that where you live can significantly impact your insurance costs? Different regions in New Zealand carry different risks. Living in certain areas with higher crime rates or more accidents can lead to a higher insurance premium, as the likelihood of theft, vandalism, or accidents may be greater in these areas.
Driving history: Your driving history is very important. Insurers see drivers with accidents, tickets, or claims as higher risk. On the other hand, a clean record shows you drive responsibly and can help lower your insurance premium.
Insurance companies look at details like the number of accidents you’ve had, speeding tickets, drink-driving offences, and any claims you've filed before. Each of these can increase your premiums. You can build a good driving history by avoiding accidents and limiting claims.
Comprehensive vs. Third-Party car insurance
It’s important to understand the main differences between comprehensive and third-party cover.
Comprehensive car insurance
Comprehensive car insurance offers the most extensive protection. It covers damage to your car as well as other people’s property in cases such as accidents, theft, fire, and vandalism.
Third-party and Third-party, fire and theft Insurance
These types of insurance work differently. They only cover damage to other people’s vehicles or property if you are at fault in an accident, but they do not cover any damage to your own car. Due to these differences in purpose, there are variations in cover.
What comprehensive car insurance covers
Comprehensive car insurance in New Zealand provides the highest level of cover, protecting you in a range of situations, including accidental damage, theft, fire, vandalism, and natural disasters.
If your car is damaged in an accident, comprehensive car insurance will cover the repair costs. If your car is deemed a total loss, it will provide you with the agreed or market value. This insurance also covers theft, fire damage, and damage caused by natural disasters such as floods or storms.
Many comprehensive policies also include windscreen cover, which is useful for repairing or replacing a damaged windscreen. This means you won’t have to pay out of pocket if something like a stone chips your windscreen while driving.
People often aren’t fully aware of what comprehensive car insurance covers. While they know it offers broader protection than third-party insurance, they might not realise it can also include cover for accommodation, car hire, emergency transport, public liability, new vehicle replacement, and even death or permanent disablement.
To find out what benefits are included in your comprehensive car insurance policy, sign up with Quashed, load your policy documents, and use Market Scan.
When should you consider Third-party?
Third-Party and Third-Party, Fire, and Theft insurance are more affordable car insurance options. If the cost to repair your car is higher than its actual value, opting for comprehensive cover may not be the best choice. It’s important to weigh up the pros and cons. If you can afford higher premiums, comprehensive vehicle insurance offers much better protection for your car and provides greater peace of mind and security.
Practical tips for reducing insurance costs
How much can you save on your vehicle insurance? The answer depends on your personal situation and current policy. Here are six effective ways to reduce car insurance premiums
Shop around for quotes: The most important step is to shop around — that’s where Quashed’s car insurance comparison tool comes in. Our platform lets you compare quotes from multiple insurers in one place, eliminating the hassle of visiting individual websites.
Rethink your vehicle choices: If you're purchasing a new car, remember that insurance costs can vary significantly by make and model. Many drivers overlook this cost, focusing more on maintenance or fuel expenses. Considering insurance rates for different models upfront can help you choose a car that aligns with your budget
Increase your excess: Opting for a higher excess (deductible) often results in lower monthly premiums, making it a viable choice for finding cheaper car insurance NZ drivers may prefer. However, be sure you can cover this higher excess if you need to make a claim.
Check your sum insured: Ensuring that the insured value of your vehicle is accurate can help avoid overpaying. Use tools like Trade Me’s car valuation tool to determine the fair market value. Affordable car insurance relies on accurate valuations.
Consider excluding young drivers where possible: Adding drivers under 25 to your policy can significantly increase premiums due to higher risk. If younger drivers don’t regularly need to use the car, omitting them from the policy can help lower costs.
Consider switching to third-party for low-value vehicles: If your car’s market value has depreciated, consider switching to third-party car insurance policies, which are typically cheaper than comprehensive options. Third-party coverage can still protect you against costs associated with damages to others’ vehicles or property.
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Useful add-ons for motor insurance
While basic motor insurance policies provide essential coverage, consider adding extra options to enhance your protection. These add-ons offer more benefits and financial security in certain situations.
Roadside assistance and its advantages
Roadside assistance is a helpful service that supports you when your car has problems. This service usually isn’t included with basic plans, but it can be invaluable if you have a breakdown, a flat tyre, a dead battery, or if you lock your keys in your vehicle. With roadside assistance, you’ll feel safe knowing that help is just a phone call away.
Here are some benefits you can get from roadside assistance:
Mechanical breakdown: Get help with minor repairs. If your car won't run, they can tow it to a garage.
Flat tyre assistance: Get help to change a flat tyre. If needed, they can tow your car to the nearest tyre repair shop.
Battery jump-start: If your car battery dies, roadside assistance can jump-start it, allowing you to drive again.
Lost keys: Get help when your keys are locked inside your car. They can also tow your car to a dealership for a new key. Some comprehensive car insurance plans cover this. The cost can be hundreds or even thousands for smart keys.
Windscreen cover and other additions
Windscreen cover can be an important addition to your policy. It helps you avoid paying for fixing or replacing the windscreen. On Kiwi roads, loose gravel and debris can hit the glass and cause damage. A tiny chip can quickly turn into a large crack, leading to costly repairs or a full replacement.
Including windscreen cover in your car insurance can help you save money. Some insurance plans offer no-excess windscreen cover, meaning you can fix your windscreen without needing to pay anything extra.
You can choose additional options like rental car reimbursement and personal belongings protection. Rental car reimbursement helps cover the cost of a rental car while your car is being repaired. Personal belongings protection helps cover your items against theft or damage in your car. You can also get roadside assistance.
Motor insurance claims - what to do?
The motor insurance claims processes might feel overwhelming, especially after an unexpected event. Knowing the steps can help you go through the process more easily and get your claim settled quickly. After an incident, it's important to focus on safety. You should gather the necessary information and let your insurance provider know right away to start the claim based on your individual circumstances.
After an accident
In a car accident, your safety and the safety of others is very important.
First, check for any injuries. Then, call the police right away. This is especially important if there is a lot of damage, injuries, or arguments about who caused the accident. Getting a police report is key. This paper is an official record of what happened.
While you are at the scene of the accident, try to collect as much information as you can. Write down the names, contact numbers, addresses, and insurance details of everyone involved. If there are witnesses, get their names and contact information too. Remember to take photos of the accident scene, any damage to vehicles, and visible injuries.
Lastly, report the accident to your insurance company as soon as you can. Share all the important information you collected, which includes the police report, witness information, and related photos.
Making a claim
To start an insurance claim, call your insurer using their claims or use their website.
Give them your policy details and explain what happened. Share any proof you have, like a police report, photos, witness statements, or repair estimates.
Make sure to keep track of all your communication. Write down claim numbers, dates, and times of calls. Keep copies of any documents you send. By providing correct information and following the claims steps, you can help make the process faster and easier.
Keep a log of all your communications.
Write down claim numbers, dates, and times for your calls.
Also, keep copies of any documents you send.
If you share clear information and follow the claim steps, you can help make the process faster and easier.
Comparing policies: what to consider
According to Quashed CEO, Justin Lim: "When comparing car insurance policies, it's essential to look beyond just the price. It's important to compare coverage options, benefits, excess, and exclusions to find a policy that best suits your needs, driving habits, and budget".
Quashed offers a comprehensive comparison of vehicle insurance options from New Zealand’s top insurers, helping you make an informed decision. You can easily see premium prices, excess amounts, financial strength ratings, and the sum insured, all in one place.
Additional details such as coverage for damage, theft, windscreen/glass, breakdown services, lost keys, trailer cover, and liability limits are clearly laid out. Plus, you’ll find special offers and discounts, along with information on extras like rental car hire, emergency towing, and personal injury cover.
With Quashed, you can quickly identify the most suitable and cost-effective insurance plan for your vehicle.
Wrapping it all up
It's important to understand motor insurance in New Zealand. Knowing details like the type of vehicle, your driving history, and additional policy options can affect your costs. You can choose between comprehensive and third-party cover. There are ways to lower your expenses too. The good news is that Quashed helps you manage your car insurance in one place.
FAQs
What's the best way to get an insurance quote for my motor vehicle in NZ?
The best way to get an insurance quote in New Zealand is to use an online comparison platform like Quashed, where you can compare quotes from multiple insurers. This allows you to easily see the different coverage options, premiums, and benefits side-by-side, helping you make the best decision for you.
To find out more visit our car insurance FAQs.
