Car insurance in New Zealand can be tricky to figure out. Prices are rising, and many people want to find options that are both affordable and offer good value. It is essential to choose the right insurance provider. Companies like Tower, AA, and Cove can help you protect your finances and feel more secure. This guide will explain what a comprehensive car policy is in New Zealand.
With this guide, you will learn about motor insurance policies. It will explain the different policy wording and coverage choices. You will also find tips to save on your premiums. We will share helpful insights and important factors to think about. This will help you make better choices.
What is motor insurance?
Motor insurance in New Zealand is very important. It helps cover accidents, theft, fire, and natural disasters. It also protects you against third party fire. Having good insurance is essential even if it is not required by law. Without enough coverage, accidents can cost you a lot. Comprehensive car insurance gives you solid protection. It covers damage, theft, fire, and vandalism. Customers can choose between market value or agreed value, which depends on the time of the incident. Hot tip: Want to know how to choose the best coverage for your needs? Check out our guide on key factors for choosing car insurance.
Types of motor insurance
There are different types of motor insurance policies to fit various needs and budgets.
Third-party car insurance: This insurance helps you pay for damage that you cause to other people’s cars and property. It does not help with damage to your own car.
Third-party, fire, and theft insurance: This type of insurance protects against damage to other people’s cars and their property. It will also help if your car is stolen or damaged by fire. However, it will not cover repairs to your own car if you cause an accident.
Comprehensive car insurance: This insurance covers several kinds of damage to your own car. It includes damage from accidents, fire, theft, vandalism, natural disasters, and more. It also comes with the benefits of third-party, fire, and theft coverage.
Hot tip: Not sure which insurance type is right for you? Read our blog on what car insurance covers.
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 |
Hot tip: Make sure you’re not overpaying! Here some savvy tips for Kiwis to reduce their car insurance costs. Electric vehicles can come with different insurance rates. Find out why electric vehicles may cost more to insure in our blog on Electric Vehicles: Do They Cost More to Insure?
What determines the cost of car insurance?
Here are some main factors that influence car insurance costs:
Age: Young drivers, especially those under 25, usually pay more because they have a higher chance of getting into accidents.
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 - Auckland is a great example. 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 think about many things. They check how many accidents you’ve had, any speeding tickets, drink-driving problems, and your previous claims. Each of these can make your premiums go up. To lower your payments, keep a clean driving record. This means you should avoid accidents and have fewer claims. Hot tip: Want to know why is car insurance is so expensive? Read our blog to find out more.
Comprehensive vs. Third-Party car insurance
It is important to understand the main differences between comprehensive coverage and third-party coverage.
Comprehensive car insurance
Comprehensive car insurance offers great protection. It helps cover the costs of fixing your car. It also pays for damage to other people's property. This includes problems like accidents, theft, fire, and vandalism.
Third-party insurance helps you when you hurt someone or harm their property.
Third-party, fire, and theft insurance gives you extra protection. It covers injuries to others, damages to their property, and also protects your own vehicle from fire or theft.
This kind of insurance is a good choice if you want more coverage for your needs.
These kinds of insurance are different. They help pay for damage to someone else's car or property if you cause an accident. However, they do not cover damage to your own car. So, there are several types of coverage you can choose from.
What comprehensive car insurance covers
Comprehensive car insurance in New Zealand gives you great protection. It covers many cases, such as accidental damage, theft, fire, vandalism, and natural disasters. This type of car insurance offers high levels of cover. It helps you feel safe and secure.
If your car gets damaged in an accident, comprehensive car insurance can help cover the repair costs. If your car is ruined, it will pay you either the agreed value or its market value. This kind of insurance also protects you against theft, fire, and natural disasters like floods or storms.
Many insurance plans have windscreen cover. This cover helps you fix or change a broken windscreen. If a stone hits your windscreen when you are driving, you don’t have to pay anything with this cover.
Comprehensive car insurance can be hard to understand at times. People often know that it offers more protection than basic third-party insurance.
However, they might miss out on several key features it includes. These features are costs for accommodation, a rental car, emergency transport, public liability, and replacement if you buy a new car. It can even provide help in cases of death or permanent disability.
To enjoy the benefits of your comprehensive car insurance policy, you can register for Quashed.
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 more than its value, you may not require comprehensive insurance. It’s important to weigh the benefits and drawbacks of each option. If you can afford higher premiums, comprehensive car insurance offers better protection. This can make you feel safer when driving.
Hot tip: While cheaper insurance may seem appealing, it's important to understand the coverage you're getting. Learn more about the difference between the cheapest and best car insurance in NZ in our blog.
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.
Hot tip: Want to know more? Here some savvy tips for Kiwis to reduce their car insurance costs.
The average Kiwi household can save
$2,023.79 a year by shopping their insurance!
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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.
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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.
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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. Hot tip: One of the best ways to get the right coverage is by comparing quotes from different providers. Our blog on Car Insurance Quotes explains how to get and compare quotes to make an informed decision
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
Who typically has the cheapest car insurance in NZ?
The cheapest car insurance often depends on the type of coverage and the driver’s profile. Generally, younger drivers and those with newer cars might pay higher premiums. However, people with clean driving records, driving older cars, or opting for third-party insurance often get the best rates. It’s always a good idea to compare quotes to find the best deal for you! Learn how to find the right policy for your car by reading our blog Insurance Costs for Top Cars.
Who are the top 3 car insurance companies in NZ?
While the best insurance company for you depends on your needs, AMI, State, and Tower are often considered some of the top players in New Zealand’s car insurance market. They offer a range of policies, and many customers appreciate their customer service and flexibility. Make sure to compare the options that suit your specific requirements before deciding! For help in choosing the right provider, check out our blog on Key Factors in Choosing the Best Car Insurance.
Why is car insurance so expensive in NZ?
Car insurance in New Zealand can be pricey due to several reasons—the cost of car repairs, the high number of road accidents, and even the cost of parts and labour. If you're driving a high-performance or luxury vehicle, that can bump up the cost too. But don’t worry! Shopping around and choosing the right type of cover can help you find a more affordable option. For tips on how to save, check out Smart Ways to Slash Your Car Insurance.
What is the average cost of car insurance in NZ?
The average cost of car insurance in New Zealand can vary based on factors like the type of cover, your driving history, and the car you're insuring. On average, you might expect to pay around $1,000 to $1,500 per year for comprehensive cover. But it could be cheaper if you choose third-party insurance or have a clean driving record! For more insights on car insurance costs, check out our blog. To find out more visit our car insurance FAQs.
