Figuring out car insurance in New Zealand can feel like a bit of a mission. With car insurance premiums climbing, you want something that’s affordable yet offers good coverage. That’s where this guide has your back. We’ll break down the different types of car insurance policies, explain the jargon, and share tips to help you save on premiums. Plus, we’ll give you insights into comparing car insurance in New Zealand, so you can choose a policy that works for you—without all the hassle.
What is car insurance?
Car insurance in New Zealand is all about protecting you and your wallet when things go wrong on the road. It helps cover the costs of accidents, theft, fire, and natural disasters, as well as third-party claims. While having car insurance isn’t a legal requirement in NZ, it’s a smart way to avoid hefty bills if the unexpected happens.
If you’re after the most complete protection, comprehensive car insurance has you covered. It includes damage to your car, theft, fire, and even vandalism. Plus, you can choose between a market value or agreed value policy, depending on how you want your car’s value assessed at the time of a claim.
Types of car insurance
There are different types of car insurance policies in New Zealand designed to fit a range of needs and budgets. Here’s how the options stack up:
Third-party car insurance
This is a basic level of coverage that helps you pay for damage caused to other people’s vehicles or property. However, it won’t cover damage to your own car.
Third-party, fire, and theft insurance
This policy covers damage to other people’s property and also protects your car against fire or theft. But, if you cause an accident, repairs to your car won’t be covered.
Comprehensive car insurance
For the most complete coverage, comprehensive car insurance in NZ protects against a wide range of risks. It includes damage from accidents, fire, theft, vandalism, natural disasters, and more. Plus, it comes with all the benefits of third-party, fire, and theft coverage.
How much does car insurance cost in New Zealand?
Now that we’ve covered who provides car insurance in New Zealand, let’s explore how much it might cost you.
The average annual cost of comprehensive car insurance in New Zealand was $1,325 as of Q4 2024, reflecting a 6.7% increase from the previous year. Premiums vary based on factors such as location, driving history, and the type of coverage you choose.
Yearly $ | |
|---|---|
National | $1,325 |
Auckland | $1,600 |
Canterbury | $1,230 |
Wellington | $1,155 |
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.
Why are car insurance costs increasing?
While the national average premium has risen by 6.7% year-on-year, the increase varies depending on location and driver profile. Insurers factor in inflation, repair costs, claims trends, and regional risks when setting premiums. Notably:
Young drivers (18-24) still pay the highest premiums, averaging $1,667 per year.
Older age groups (61+) have seen the sharpest two-year increase, with premiums rising by nearly 45%.
Auckland remains the most expensive region for car insurance, with average premiums of $1,600—$275 higher than the national average.
Wellington has the lowest average premiums at $1,155—$170 below the national average.
With costs on the rise, you might be wondering—what actually determines how much you pay for car insurance?
What factors affect the cost of car insurance in New Zealand?
Car insurance premiums aren't random—they're calculated based on risk factors that insurers assess carefully. Here’s what influences the price you pay in New Zealand:
Age: Young drivers, especially those under 25, usually pay more because they’re considered higher-risk and more likely to get into accidents.
Vehicle make and model: The type of car you drive significantly impacts your insurance premium. Insurers consider its value, safety features, repair costs, and theft risk. High-performance cars or vehicles that are more likely to be stolen typically come with higher premiums.
Where you live: Your location plays a major role in determining your premium. For instance, certain regions in New Zealand, like Auckland, carry higher risks due to higher crime rates or accident rates. Areas with greater risks of theft, vandalism, or accidents often result in higher premiums.
Driving history: A clean driving record can help lower your insurance premium. Insurers look at accidents, tickets, or claims to assess how much of a risk you might be. The fewer incidents you have, the better your chances of getting a lower rate.
Other factors to consider:
Insurance companies also evaluate your accident history, speeding tickets, drink-driving convictions, and previous claims. Each of these can increase your premium. To keep costs down, focus on maintaining a clean driving record and minimising claims.
Comprehensive vs Third-party car insurance
Understanding the differences between comprehensive car insurance and third-party coverage is key to choosing the right policy for your needs.
Comprehensive car insurance
Comprehensive car insurance offers extensive protection. It covers repairs to your car, damage to others’ property, and incidents like accidents, theft, fire, or vandalism.
Third-party insurance protects you from liabilities for damage to others’ property or injuries.
Third-party, fire, and theft insurance includes the above but adds coverage for fire or theft of your vehicle.
While these types of third-party insurance help cover damage to others’ property, they don’t protect your own car. Comprehensive insurance steps in to cover these gaps.
What comprehensive car insurance covers
Comprehensive car insurance in New Zealand is designed to protect against a wide range of risks, including:
Accidental damage, theft, fire, vandalism, and natural disasters like floods or storms.
Repair costs if your car is damaged in an accident. If it’s written off, you’ll receive either the agreed value or market value of your car.
Windscreen cover, helping you repair or replace a broken windscreen at no extra cost.
Beyond these, comprehensive car insurance may also include:
Accommodation and rental car costs.
Emergency transport and public liability coverage.
Replacement of your car if it’s a total loss.
Financial assistance in cases of death or permanent disability.
When should you consider third-party insurance?
Third-party insurance (including fire and theft options) is typically more affordable. It’s a good option if the cost to repair your car is more than its value, or if you’re looking for basic protection against damage to others.
However, if you can afford higher premiums, comprehensive car insurance provides better protection, covering a wider range of risks. Weigh the benefits and drawbacks to find the right balance for your situation.
Curious about car insurance? Check out our Further Reading section packed with insights on everything from understanding car insurance to saving on premiums.
Practical tips for reducing insurance costs
How much can you save on vehicle insurance? The answer depends on your personal situation and current policy. Here are six effective ways to reduce car insurance premiums in New Zealand:
Shop around for quotes: The most important step is to compare quotes—that’s where Quashed’s car insurance comparison tool comes in. It lets you compare quotes from multiple insurers in one place, eliminating the hassle of visiting individual websites.
Rethink your vehicle choices: If you’re buying a new car, remember that insurance costs vary significantly by make and model. Many drivers focus on fuel or maintenance expenses but overlook insurance rates. Choosing a car with lower insurance costs can help align with your budget.
Increase your excess: Opting for a higher excess (deductible) can lower your monthly premiums, making it an attractive option for finding cheaper car insurance in NZ. Just ensure you can afford the excess if you need to make a claim.
Check your sum insured: Accurately valuing your vehicle prevents overpaying on premiums. Tools like Trade Me’s car valuation tool can help determine the fair market value. Affordable car insurance depends on having an accurate sum insured.
Consider excluding young drivers: Adding drivers under 25 to your policy can increase premiums due to higher risk. If younger drivers don’t regularly need to use the car, excluding them from the policy can lower costs.
Switch to third-party for low-value vehicles: If your car’s market value has depreciated, consider switching to a third-party car insurance policy. It’s typically cheaper than comprehensive coverage while still protecting against damages to others’ vehicles or property.
Want to learn more? Check out our Further Reading section—it's full of useful info.
Useful add-ons for car insurance
While basic car insurance policies provide essential coverage, adding extra options can enhance your protection. These add-ons offer valuable benefits and financial security for certain situations.
Roadside assistance and its advantages
Roadside assistance is a helpful service that supports you when your car has unexpected issues. It’s not usually included in basic plans, but it can be invaluable if you face a breakdown, flat tyre, dead battery, or lock your keys in the car. With roadside assistance, help is just a phone call away.
Here are some benefits of roadside assistance:
Mechanical breakdown: Get help with minor repairs or towing to a garage if your car won’t run.
Flat tyre assistance: Get your tyre changed or your car towed to the nearest repair shop.
Battery jump-start: If your battery dies, roadside assistance can jump-start your car so you can keep moving.
Lost keys: Get help if you’ve locked your keys in your car or lost them entirely. Some comprehensive car insurance plans include this, saving you the high cost of replacing smart keys.
Windscreen cover and other additions
Windscreen cover is another valuable add-on for your car insurance. On New Zealand roads, loose gravel and debris can damage your windscreen, leading to costly repairs or replacements. Including windscreen cover in your policy means you can fix chips or cracks without paying extra, especially if your insurer offers no-excess windscreen cover.
You can also consider these useful options:
Rental car reimbursement: Covers the cost of renting a car while your vehicle is being repaired.
Personal belongings protection: Covers theft or damage to items left in your car.
These add-ons provide valuable support and help you manage unexpected costs effortlessly.
Car insurance claims—what to do?
Filing a car insurance claim can feel overwhelming, especially after an unexpected event. Knowing the steps can make the process smoother and help get your claim settled faster. After an incident, it’s crucial to prioritise safety, gather essential information, and contact your insurer promptly to start the claims process.
After an accident
If you’re in a car accident, your safety and the safety of others should always come first.
Check for injuries: Assess yourself and others for injuries. Call emergency services if anyone needs medical attention.
Contact the police: Notify the police immediately if there are injuries, significant damage, or disputes over fault. A police report is a key document for your claim.
Gather information at the scene:
Record the names, contact numbers, addresses, and insurance details of everyone involved.
Collect information from witnesses, including their names and contact details.
Take clear photos of the accident scene, vehicle damage, and any visible injuries.
Once you have this information, report the accident to your insurance provider as soon as possible. Share all relevant details, including the police report, witness statements, and photos.
Making a claim
To start a claim:
Contact your insurer: Reach out via their claims hotline or website. Provide your policy details and a clear explanation of what happened.
Submit evidence: Share supporting documents, such as the police report, photos, witness statements, and repair estimates.
To ensure a smoother process, keep track of all communication and documentation:
Log claim numbers, dates, and times of your calls.
Keep copies of all documents you send.
Maintain a detailed record of your communication with your insurer.
By providing accurate information and following these steps, you can help speed up the settlement process.
Want to learn more about car insurance? Check out our Further Reading section for additional tips and insights.
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 provides a comprehensive comparison of car insurance options from New Zealand’s insurers, helping you make an informed decision. You can easily review premium prices, excess amounts, financial strength ratings, and the sum insured—all in one place.
Additional details to consider include:
Coverage for damage, theft, and windscreen/glass repairs.
Breakdown services for roadside emergencies like flat tyres or dead batteries.
Lost key replacement and trailer cover for added protection.
Liability limits to protect against third-party claims.
Plus, explore extras like rental car reimbursement, emergency towing, and personal injury cover. These features are clearly laid out, making it easier to find a policy that fits your needs.
Join 45,000+ Kiwis making smarter insurance choices
Managing your car insurance shouldn’t be a hassle. Over 45,000 Kiwis have already joined Quashed to simplify their insurance journey, taking advantage of tools that offer:
Real-time insights to evaluate your premiums and benefits.
Side-by-side comparisons of policies from New Zealand’s top insurers.
Flexible options to adjust your policy type, excess, and sum insured—helping you find the fit for your needs and budget.
Whether you’re looking to save money or improve your coverage, Quashed makes it easy to find a policy that works for you—all in one place.
Sign up with Quashed now and experience an easy way to manage and compare car insurance.
Further reading
Keen to learn more? Here are some great reads:
Understanding car insurance
What Car Insurance Covers: A breakdown of what’s typically included and what’s not.
Compulsory Car Insurance: Should car insurance be mandatory in New Zealand?
Choosing Car Insurance: Key things to consider when picking a policy.
Debunking Car Insurance Myths: Common misconceptions that could cost you.
Why Is Car Insurance So Expensive?: The factors driving rising premiums in NZ.
Switching to Third-party: Key factors to consider before switching and what to watch out for.
Car insurance for young drivers: A no-nonsense guide for young kiwis.
Saving on car insurance
Smart Ways to Slash Your Car Insurance: Practical tips to cut costs without sacrificing cover.
Sorting Out Your Car Insurance Renewal: Steps to avoid surprises and keep your policy working for you.
Car Insurance Quotes: What to look for when comparing quotes from different insurers.
Cheapest vs Best Car Insurance: Finding the right balance between cost and coverage.
Car Insurance for specific vehicles and locations
Comparing Insurance Costs for Top Cars: See how different car models impact your premium.
Car Insurance for Aucklanders: Unique challenges and costs for drivers in Auckland.
Insuring Your Toyota Aqua: Key points to know for this popular hybrid.
Car Insurance for Tesla: Insights on premiums for the Tesla.
Electric Vehicles and Insurance: Understanding the cost differences compared to petrol cars.
FAQs
Finding affordable car insurance for young drivers
How can young drivers in New Zealand find affordable car insurance?
Young drivers looking for cost-effective car insurance in New Zealand can explore several strategies. Opting for a vehicle with a lower insurance risk profile, maintaining a clean driving record, and selecting policies that may offer safe driving rewards could help reduce premiums. Some insurers may also provide discounts for completing recognised defensive driving courses. Comparing quotes from multiple providers is essential, as coverage and pricing vary widely between insurers.
Understanding different types of car insurance
What’s the difference between third-party and comprehensive car insurance?
Third-party car insurance helps cover the costs of damage you cause to other people’s property but does not cover damage to your own vehicle. Comprehensive car insurance includes third-party coverage while also providing protection for your own vehicle against accidents, theft, and natural events. Coverage details and terms differ between insurers, so reviewing policy documents is recommended.
Insurance premiums & cost factors
Why are car insurance premiums higher for drivers under 25 in New Zealand?
Insurance premiums for drivers under 25 are generally higher due to statistical data indicating an increased likelihood of claims within this age group. This perceived higher risk often results in insurers adjusting premiums to reflect potential costs. However, pricing and risk assessments differ between providers, making it worthwhile to compare options.
How does the excess affect my car insurance premium?
The excess is the amount you agree to pay out-of-pocket when making a claim. Choosing a higher excess can often lower your premium, but it’s essential to ensure the amount is affordable in the event of an accident. Some insurers may have minimum excess requirements, so reviewing policy terms is advisable.
Car Insurance & legal requirements
Is car insurance mandatory in New Zealand?
Car insurance is not legally required in New Zealand, but having at least third-party insurance is strongly recommended. Without coverage, you could face significant financial liability if found at fault in an accident.
Can I drive legally in New Zealand without car insurance?
Yes, it is legal to drive without car insurance in New Zealand. However, in the event of an accident where you are at fault, you will be personally liable for damages. This could result in significant financial costs, making car insurance a prudent investment.
Choosing the right car insurance provider
What factors should I consider when choosing a car insurance provider in New Zealand?
When selecting a car insurance provider, consider factors such as premium costs, excess amounts, and coverage inclusions. Customer reviews may offer insights into claims experiences, but individual circumstances vary. Additional considerations include multi-policy discounts, rewards for safe driving, and the financial stability of the insurer.
Are there car insurance options tailored for young or high-risk drivers in New Zealand?
Certain insurers offer policies that may be better suited to young or high-risk drivers, which could include higher excesses or adjusted premiums. Exploring different options, understanding coverage limits, and considering additional benefits can help in finding the right policy.
Claims process & uninsured drivers
How can I ensure a smooth claims process with my car insurance provider?
A hassle-free claims process starts with choosing an insurer known for a strong track record in claims handling. Providing accurate information when purchasing a policy, understanding the terms and conditions, and keeping detailed records in case of an incident can all help streamline the experience. Prompt communication with your insurer and submitting the necessary documentation without delay will also assist in a smoother resolution.
What should I do if I’m involved in an accident with an uninsured driver in New Zealand?
If you’re in an accident with an uninsured driver, having comprehensive or uninsured motorist coverage may help cover some costs, depending on the policy terms. Without this coverage, recovering damages may require legal action, which can be complex and costly. Understanding your policy’s protections in advance can help mitigate financial risk.
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.
