*Household average savings is calculated assuming: 2 x Cars, 1 x House and 1 x Contents insurance policy. Average price difference and median price difference are calculated from data generated by Market Scan across thousands of quotes from 1 Jan 23 to 31 Mar 23
It is estimated that roughly 90% of cars are insured in the country even though it is not required by New Zealand law. Most of us will likely have had some form of car insurance since we were able to drive at the age of 16.
Below is a comprehensive guide to car insurance in New Zealand.
Read on to learn about car insurance, explore the different options across insurance companies, and how you can find the cheapest car insurance or the best car insurance for you. We will also cover off car insurance for under 25 years old and highlight the key differences and how you can save.
Car insurance in New Zealand is typically offered in three tiers:
Third Party Fire & Theft
Comprehensive car insurance is the most common type of car policy purchased. It provides the most benefits and it insures you for damages to your own car as well as the other “third party” in an accident.
This means in an accident, it does not matter whether you are at fault - not only is the other party’s car covered but your car is also covered. You will be able to make a claim for the repair or replacement of your car.
On the other hand, Third Party Fire & Theft car insurance or Third Party car insurance will insure the cost of repairing or replacing the other person’s car in the event of an accident. Your car will not be covered. Any repair costs or cost to replace your car will be out of your pocket. Fire & Theft cover is just that - insurance that covers your car if it is stolen or it is damaged by fire.
We recommend that all car owners purchase car insurance.
If you are wondering whether you need car insurance, here are some statistics and facts that can help you make up your mind. Ministry of Transport data shows in 2019, more than 8,500 crashes were recorded. Many more minor car accidents will not have been captured. ACC also reports that they receive 40,000 new claims a year from crashes.
When it comes to the cost of replacing a car, RNZ reported in 2021 that the average cost of a small car in New Zealand has risen from $15,000 to $18,000. For a large sized car, this jumped from $34,000 to $40,000. Prices are up about 15%. So if you happened to get into an accident and wrote off your car, it will not be cheap to replace your car or the other party’s. In a worst case scenario, the other party’s car could be really expensive i.e. more than $100,000+ which would become a huge debt burden for you if you were not insured.
Even the very best drivers can get into accidents whether it is your fault or that of another driver. Simply, the cost of insurance versus the cover it offers provides for good value and peace of mind. It can protect you against financial stress and helps you to bounce back if you get into an accident.
So should you consider getting Comprehensive car insurance or the lower level of protection that Third Party Fire & Theft and Third Party car insurance offers is good enough? Short answer, it depends.
One way to think about this is if your car is relatively cheap and you have the means to replace it if you get into an accident, then Third Party (or Third Party Fire & Theft) car insurance could be enough for you.
Third Party car insurance typically costs roughly 30% of comprehensive car insurance. We found comprehensive car insurance on average cost $830 versus the $300 average yearly premium for Third Party car insurance.
On the other hand, if you have an expensive car, for example it’s worth $40,000, then you may not want to take the risk of having to replace or repair the car out of your own pocket if you get into an accident and it is your fault (or risk the other driver not having insurance). In this case, Comprehensive car insurance looks to be a much better choice.
Another way to consider whether Comprehensive car insurance or Third Party car insurance is right for you is the benefits you look for within your insurance.
Third Party (including Fire & Theft) policies are very simple and do not come with many of the benefits that Comprehensive car insurance comes with.
For example, most Comprehensive car insurance policies offer some form of insurance protection against you losing your car keys or it being stolen. The replacement cost for keys and to replace locks can easily be in the hundreds, and some, even thousands of dollars these days. Most, if not all, of the Third Party car insurance policies we have seen do not offer cover for this. Other benefits that are often offered by Comprehensive car insurance include: Trailer cover, Children’s Car Seat cover, Accommodation and Transport cover in the event you are stranded somewhere after an accident and require transport or accommodation.
The main benefit and reason for Comprehensive car insurance is to get complete peace of mind knowing that the cost to repair or replace your car in the event of an accident is covered. While also insuring against the other party not having insurance.
Third Party (including Fire & Theft) does not cover the cost to repair or replace your vehicle in an accident. And, it only offers very limited cover when an uninsured party who is at fault crashes into your car (e.g. up to $3,000).
To easily compare prices and benefits across multiple insurance companies, check out Quashed Market Scan feature. It saves you the time, hassle and effort required to visit and complete multiple forms with each insurance company.
Finding the best car insurance can mean a few different things for different people.
For some, it might be the cheapest cover. Others, it might mean the most benefits that are provided within the policy and also higher limits of cover. And some others, it might mean a great experience with being able to access help over the phone or online. And yet for some others, it might mean having the best hassle free claim experience.
Let’s cover off a few of these different ways to think about what best car insurance might look like for you.
For those wanting the cheapest possible car insurance, the best way to do this is to compare price differences across the different insurance companies on the market. Most of the major insurance companies offer online quotes such as AA insurance, Tower, AMI and State insurance.
If you are after a quick and easy way to compare, check out Quashed Market Scan feature where you only need to enter your information once to scan across multiple insurers for quotes. This will easily save you an hour or even more of your time depending on how tech savvy you are. Also, Market Scan results bring back not only quotes, but also a comparison table for the benefits across insurance companies.
Quashed has found that by comparing, you can find $300+ in price difference and potential savings across insurers. In some cases, customers can find $1,000+ in price difference for those that are paying high premiums.
If you are on the hunt for car insurance with the most benefits and highest level of cover, then you will want to dive into the details of each cover to look at the types of benefits offered (e.g. cover for stolen or lost keys, accommodation and transport cover, windscreen cover, etc.) and the level of cover.
Some insurers may offer cover for lost or stolen keys for example, but their limit on making a claim might be only $300 for that particular benefit whereas another insurer might offer up to $1,000 for that similar cover. Others still may not offer it at all. In this example, if we are to look at lost or stolen keys within Comprehensive car insurance policies, State insurance offers up to $300 of cover whereas Tower offers up to $1,000. AMI on the other hand does not provide cover for this.
If you want to compare benefits and limits, you can either go to each insurer’s website and create a table to compare this or, use the quick and simple option which is the Quashed Market Scan feature. You can get quotes and also it will return you a comparison table across all these benefits in just a few clicks. It saves you time and money, while finding you the best car insurance you are looking for.
For those of you that are interested in finding the best car insurance experience, there are a number of ways to look at this. One way is to look at the results provided from surveys done by organisations such as Consumer NZ or Canstar to review how customers are finding their experience.
As covered above, the best way to look for cheap car insurance is to compare across different insurance companies.
Here is a guide to finding cheap car insurance and a few tips to lower your car insurance costs. To find cheap car insurance, simply compare. You would be surprised to find out that by comparing, at times you can find price differences as much as 50% or more.
To compare car insurance, you can either opt to visit individual insurance websites such as AA, State, AMI, Tower and others, to key in your car, address and personal information each time to get a quote, or you can simply use Quashed Market Scan feature. Quashed allows you to compare price and benefits against your existing car insurance policy, or you can simply find comparisons for a new cover. Both saves you a time, hassle and money.
Here are several ways to minimise your car insurance cost:
Purchase Third Party or Third Party Fire & Theft car insurance. This is typically 30-40% of the cost of Comprehensive insurance. Read above to learn more about the key difference between these covers and if it is for you.
Lower your sum insured amount or select Market Value on your car insurance cover. However, this means being covered for a lesser amount and therefore you pay less in premiums. In the event of an accident where you need to make a claim for a write off/replacement of your car, you will receive a lesser amount. Check the amount you are insuring your car for will be enough to replace your existing one so you do not have to pay out of pocket any extra money.
Bundling with other insurance covers you have with one provider could be a way to access cheaper premiums. However, note that Quashed recommends you check to see if bundling actually saves you money because sometimes by comparing across insurance companies, you could be saving more and getting the best cover for each type of insurance. For example, AMI may have a strong Contents or Home insurance policy, but their Car insurance may not be as good in terms of benefits.
Pay less when you drive less. Some insurers will price your car insurance based on the distance or amount you use your car. For example, Cove asks how often do you use your car a week e.g. 0-2 days, 3-5 days or 6-7 days. Depending on your answer, the price you can expect to pay changes. The less you use it, the less you pay. Choosing 0-2 days of use a week instead of 6-7 days a week can save you almost 20%. Remember to be accurate and truthful or run the risk of not being able to make a claim when you need to.
Like most things, we want to know that we are purchasing the best and at a competitive price. Insurance is no different.
Insurance comparison has not been as easy in NZ compared to other countries. Comparethemarket will be widely and commonly known by many Kiwis that have lived in Australia or the UK for a period of time. Even many countries in Europe are familiar with insurance comparison sites that provide a quick and easy way to compare car insurance for prices and benefits; however NZ has been slow to adopt this.
Comparison sites that exist in New Zealand may provide an overview or comparison of the benefits or a review of a policy, but it does not provide you with prices or estimates specific to you and your car. There is a new option in the market. Quashed Market Scan was launched in 2021 and offers the best solution to comparing insurance in New Zealand.
Quashed Market Scan is a specific insurance focused scanner that does a great job of providing near real-time quotes and a comparison of benefits across multiple insurers. On average, based on Quashed’s research and data in 2021, the average consumer can save $327 a year on their Comprehensive car insurance alone.
For young drivers under the age of 25, it is known that this group is at higher risk of accidents. Therefore insurance for this group will typically cost more.
Besides costing more, there are a few other things to know about car insurance for under 25 year olds:
You will need to be added to a car insurance policy for you to be covered in most cases. Unlike for drivers over the age of 25 where most insurers will still provide cover for you if you are legally allowed to drive the car that is insured. For example, if you are over 25 and your friend gives you permission to drive their car for the weekend and it has insurance. The insurance will most likely cover you even if you are not specifically named on the policy. For under 25 year olds, this is usually not the case. Unless you are named on the car insurance policy, you run the risk of not being covered.
Your insurance excess will most likely be more than the normal excess that is paid for by those over 25. For example, AMI excess for under 25 year olds will be an additional $900 and or up to $750 for both Tower and State insurance.
You will struggle to find insurance for performance cars if you are under 25 years old. Most insurance companies will either charge you a lot of money or will not cover you for performance cars. If you do own a performance car and you are under 25 years old, you can try specialist insurers such as NAC and Club Auto. General insurance brokers will be another good way to get you some options. Connect with a General Insurance broker, on Quashed for free.
To lower the cost of car insurance for under 25 year olds, you can add your parents or someone that is older than 25 that is also driver of the car to the policy. We have seen this bring down the cost of insurance for some policies. Driving safely and not driving a performance car is another sure way to avoid paying expensive premiums.
Car accidents on your record will almost certainly increase your premiums and sometimes by a lot as insurance companies see you as a higher risk and therefore charge you for it.
Based on our research and data in 2021, across all ages we find that the average:
Comprehensive car insurance cost roughly $833 a year
Third Party and Third Party Fire & Theft cover cost roughly $300 a year
For under 25 year olds, expect to pay between $780 - $1250 for Comprehensive car insurance and between $260 - $460 for Third Party and Third Party Fire & Theft.
Read above to learn more about car insurance for young drivers and how you can save.
You can expect to pay 15% more for car insurance in Auckland when compared to Wellington. For drivers in Christchurch you can expect to pay about 5% more than the folks in Wellington for your car insurance. AA Insurance overall has the largest price difference based on different regions from our research in 2021.
The general rule when picking the amount to insure your car for is that it should be enough to pay for another similar car if your current car is completely destroyed in an accident, fire, or if it were stolen.
For example, if you were to purchase a brand new Toyota Corolla today for $30,000, selecting $30,000 for your car insurance will mean that if the car was written off, the insurer will pay out the $30,000 which you can use to buy another brand new Toyota Corolla.
When it comes to a second hand car, it can be slightly tricky. If you bought a second hand car at a really good deal and went on to insure it for that amount but got into an accident and wrote off the car, the payout from the insurance company may not be enough to get you another similar age and condition car.
For example, if a one year old Toyota Corolla is worth $25,000 but you had purchased it for $20,000 and went on to insure it for that amount and got into an accident shortly after. The payout of $20,000 may not be enough to get you a similar car as it was a one-off good deal you found.
Therefore when it comes to second hand cars, the best thing to do is to head over to a site like Trade Me and view similar cars in the same age and condition. It will give you a good indication of how much you should insure your car for. Note that in 2021, second hand car prices actually rose roughly 10% due to shortages and delays caused by covid.
Insurance companies will also have a range of how much you can insure your car for. When you are requesting a quote online, if you enter an amount that is too high (e.g. $50,000 for a 2010 Toyota Corolla) the system will prompt you to lower the amount.
There are several ways to purchase car insurance in New Zealand.
Most of us will be familiar with purchasing car insurance online through some of New Zealand’s largest insurance companies such as AA, AMI, State and Tower. There are many other lesser known insurance companies that offer car insurance that are competitively priced and provide good benefits. Alternatives such as Cove that offer great value and are based locally and backed by one of the largest underwriters in the world.
Banks are another channel where you can purchase insurance. ANZ, ASB, BNZ, Westpac and Kiwibank are some examples. Even smaller banks such as TSB, Heartland, SBS and some building societies offer car insurance.
Other alternative channels to above where you can purchase car insurance includes general insurance brokers, through car dealerships and other specialist channels such as car clubs. You can connect with a general insurance broker/adviser on Quashed for free.
To compare car insurance before you buy, Quashed Market Scan provides you with a quick and easy way to get multiple quotes and comparison of policy benefits and limits.
In the event of an accident, you are legally required to stop (safely out of moving traffic if possible), check if anyone is injured and give help if necessary. Even if you are at fault, do not accept the blame nor state it to the other driver or their insurer. Just let them know that you will have to speak with your insurer. This is because most insurers will have it in their Terms & Conditions that you must not admit fault if not your claim be dismissed.
Drivers should exchange details - name, address, contact information and vehicle registration. Ask if the other party is insured and take down their information. We think it’s best to take photos of the accident on your phone and swap driver’s license details. Make notes of the location, date, time and any other information about the accident you can recall while it’s fresh in your mind. This will come in handy when filing a claim with your insurer or if a police report is necessary. If the car is not yours, you will need to get in touch and inform the owner of the vehicle.
There are usually two ways you can make a claim with your car insurance company. First, you can give them a call. If you are using Quashed to store and access all your insurance information, simply open up your dashboard on mobile and click on the call button. It will dial you straight through to your insurer.. Alternatively, most insurers now have online claim forms. Simply go online and fill out the claim form and the insurer will be in touch with you. Next steps, your car will need to be assessed and this could involve you taking photos of it or depending on the condition drive it down to one of their assessment centres. The insurer will then work out if you need to pay the excess (when you are at fault) and the rest of it will be paid for by the insurer for the repair.
If you are not at fault, you may be able to access a free courtesy car from either your panel beater while your car is being fixed or there are specialist hire companies such as Right 2 Drive that could help provide you with a rental car for the period you do not have your car. They will look to claim the cost back from the insurer.
Check that your WOF and REGO are current as they affect your insurance cover
Do not admit liability (i.e. that you’re at fault, even if you are) in an accident
Check your car insured amount will be enough to purchase a similar replacement
Use Market Scan to compare prices, benefits and limits for your car insurance