Vehicle Insurance also known as Car Insurance protects you and your car when an accident or incident happens.
Under this insurance type, there are usually three options (3rd Party, 3rd Party Fire & Theft and Comprehensive) which offer different levels of cover including windscreen and glass damages, lost or stolen keys, repair costs, emergency roadside services and accidental damages to other's property when driving someone else's vehicle.
Car Insurance is very popular and common in New Zealand. Surveys estimate that between 70-90%+ of cars on the road are insured.
We think Car Insurance is a good idea. Cars are one of the most expensive things we own and easily cost thousands of dollars. Even if you think you are a great driver, you can’t say the same for others out there. In the unfortunate event where they crash into you and can’t afford the repair costs, you don’t want to spend thousands from your own pocket, or worse, replace the car entirely. Most Car Insurance comes in three levels and covers different things. Choose the right policy for your need and find out where you are covered and where you are not.
First, pick a Car Insurance company such as AA, AMI, State, Tower, or from a bank like ANZ, BNZ, Westpac or Kiwibank. Some car dealerships will also offer Car Insurance through smaller companies like Provident Insurance.
Second, have your details ready including REGO (car number plate), the driver’s detail (DOB, drivers and driving history, address of where the car will be mostly parked. Other details you may want to prepare include your car make and model, membership information if you already have another policy with the provider, and the estimated value of your car.
Third, pick your cover type from the most common types of Car Insurance including: 3rd Party, 3rd Party Fire & Theft or Comprehensive. Here’s a quick look at their differences.
The most basic policy (3rd Party) usually only covers for the other party's car or property in the event of an accident. Other benefits like protection against Fires and Thefts, Locks and Keys, Windscreen damages are usually not part of this level. Important to note, it does not (or offers very limited) cover your own car for repairs and replacement in an accident. Most people will consider this cover if their own cars are not worth much and they can afford to replace or repair it in an accident.
3rd Party Fire and Theft provides more cover than just the basic policy to include Fire and Theft. This means that your car will now be insured for damage or replacement due to fire, theft attempts and certain natural disasters. It still does not (or offers very limited) cover for your own car due to accidents, whether you are at fault or not.
Comprehensive is usually the most expensive and offers the most protection including repairs and replacement of your car. Usually it covers for other things like Locks and Keys so you can claim up to $500 or $1,000 if your keys went missing or are stolen. This is the best option if you have a car that you can’t afford to replace entirely, and it will cover the costs of repair or replacement regardless of who is at fault in an accident. An accident could be anything from scratches from a wall to more serious car crashes.
Fourth, decide on any optional covers like windscreen cover which will cost less if you need to repair a chip or replace the entire windscreen due to a crack. Other optional covers include a covered rental car during repair, breakdown assistance and personal effects coverage. Note that some Comprehensive covers include these “optional benefits” as part of their standard terms. This means that it could be cheaper to go with the more expensive level of cover rather than picking out the extra benefits separately.
Fifth, pick an Excess you’re comfortable with. Typically Excess options usually range between $500 to $1,500. The higher the Excess the cheaper the premiums (your ongoing cost of insurance). Excess is the amount you’ll have to pay when you need to make a claim. You take away some of the risk that the insurance company takes on, so they reward you with a cheaper price (premium). However, make sure you’ve got enough in your bank to pay the Excess if you do get into an accident or needed to use your insurance. Remember, putting the Excess on your credit card is expensive!
Lastly, check that your insurance cover is still right for you every 12 months or if you have any changes to your family, income or lifestyle. For example, you will want to adjust your agreed value (the amount your car is insured for) as your car decreases in value, to help bring down your premium, or make changes to drivers listed on the policy.
Quashed is an online platform that makes it easy for you to manage and track all your insurance in one place. You’ll be prompted at the right time to check on your insurance and it helps you keep track of how your premiums are increasing each year.
The cost of your premium is different with each provider and they don't all follow the same guidelines when it comes to calculating costs. Premiums are the on-going payments you make to continue your cover and protection. Below are some of the common factors used in the industry that will play a part in determining your premium.
Your car: The type of car is a factor as different cars have different price tags and also some cars are more likely to be at risk. Things such as the past claims frequency on your car’s make and model, its engine size, the complexity of your car’s technology and its parts availability will all affect your premium. Modifications will also usually increase the price.
Your coverage: Whether it’s a 3rd Party, 3rd Party Fire and Theft or Comprehensive policy makes a big difference as it offers different levels of protection. How much the car is insured for (agreed value) or market value will also make a difference. The more it’s protected for the more you can expect to pay.
Your age: Younger, less experienced, drivers are more likely to get into accidents and so the price increases to account for this. In New Zealand, drivers under 25 are classified as younger drivers, and insurers usually stop making distinctions between driving experience after you have held a full license for 5 years.
Your driving history: Recent driving accidents and/or any violations such as speeding and drink driving will impact on the price you pay. It’s an indication of your chances of making a claim, with a clean driving history getting you the lowest price possible.
Your address: Number of accidents or claims in an area and repair cost feeds into the price. Insurance providers will also adjust the premium based on your parking location, and whether it is secure in terms of risk. If you park inside a garage, your car is considered lower risk than on-street parking, thus you will have a lower premium price.
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