Cars parked on the street outside homes during Covid-19 lockdown.
Updated 5 May 2020

Car insurance: Why the lockdown means you should get a discount

We’re calling on car insurers to pass on cost savings to consumers.

Car insurers have seen a big drop in claims during the Covid-19 lockdown, saving an estimated $100 million. We’re calling on companies to pass these savings on to consumers.

Most of us aren’t driving anywhere near as much as we usually do. As a result, accidents are down and insurance claims have dropped significantly.

However, we’re paying premiums based on the assumption we’re driving as much as normal and that the same risks of having an accident apply.

Time to play fair

Some insurers have acknowledged this isn’t fair. Several big players in the US announced they would pass their cost savings on to customers.

AA Insurance is the first insurer here to publicly state it will do the same.

Last week, the company said the drop in claims had reduced its costs and its car insurance customers would be seeing premium reductions as a result.

The company is also freezing car, home and contents premiums, and setting up a $2 million hardship fund to help customers struggling financially as a result of the lockdown.

Tower Insurance has since announced its car insurance customers will get a portion of premiums refunded as a result of lower claims. It said refunds would be passed on in late May. Further reductions may also be provided if claims continue to fall.

The Medical Assurance Society (MAS) has also said it will pass on savings to car insurance customers. MAS has set up a $2 million relief fund to support customers in hardship.

Vero has also set up a $2 million hardship fund but premiums refunds aren’t currently on the table for its customers.

IAG, which owns the AMI, NZI and State Insurance brands, has yet to confirm whether customers will get discounts. The company said it’s “our intention that any additional benefits arising from the Covid-19 lockdown and travel restrictions will ultimately flow through to our customers”.

What you can do

Ask your insurer about a refund: If you’ve got car insurance, ask your insurer about whether it will reduce premiums given claims have dropped.

Not driving your car? If you’re not driving your vehicle because of the lockdown, you can ask your insurer for a reduction in premiums (even if you’re not driving, you’ll probably still want to insure your vehicle against theft).

Struggling to pay? If you’re experiencing financial hardship, contact your insurer and ask what it can do to help. One way to reduce premiums is to have a higher excess (the excess is the amount you contribute if you need to make a claim).

Review your cover. It’s a good time to review your insurance policies. If you haven’t done this for a while, you may find you’re paying for cover you no longer need because your circumstances have changed.

Shop around: You may be able to save on insurance costs by switching companies. You can check out our latest car insurance survey results here.

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Member comments

Get access to comment

Denis S.
09 Sep 2021
Best Prices - try The Warehouse Insurance

I have been using them for a year ... they have good service.
and best prices on the market as far as I can tell.
No claims yet.
Car insurance prices have gone so much higher the last few years.

Noeleen D.
26 Apr 2020
AA Most Trusted Insurer ??

Dear Gaybrielle,
Could you confirm this is the official response from “Senior Management” of AA Insurance regarding this complaint.



From: AAI General Claims Queries NZ []
Sent: Fri, 24 April 2020 14:31
To: 'Ken Thompson'
Subject: RE: A058608709

Hello xxx

Sarah has asked me to review your request regarding your vehicle. While we cannot write it off as she has explained we do have some options available to customers that are experiencing financial hardship during this difficult times.

Our Chief Executive released some information today regarding how we may assist this includes:
• A premium increase freeze from the 16th of April 2020 for existing or renewing policies, if your policy has renewed between then and the 23rd of May we will apply the change retrospectively and you should receive an update accordingly.
• Premium rebates for car insurance customers, this will be reviewed in July and customers will be contacted at that time.
• We also have what is termed, Hardship Support, where we have a range of options available for existing customers who are suffering genuine financial hardship as a result of COVID-19. We have a specialist team ready to support you and have set aside a hardship fund to help you retain your cover during these challenging times. If you are experiencing financial hardship, please contact the team on 0800 500 213, or complete our form online, and one of our specialists will work through a solution with you.

There is no doubt that these are exceptional circumstances. If you would like to review your insurance to make sure it still suits you, or if your needs have changed, please get in touch. We are committed to working with customers to ensure your insurance cover can continue. Further detail around how AA Insurance is supporting its customers including FAQs and terms and conditions can also be found on our website.

I hope this assists.


Gaybrielle Newton
Customer Manager Team Leader

Call me on (0800) 786435
Email me at Visit us at
AA Insurance Limited | 130 Ellis Street, Frankton, Hamilton 3204 | PO Box 992, Shortland Street, Auckland 1140

Sent: Thursday 23 April 2020 5:25 PM
To: AAI General Claims Queries NZ ; AAI Customer Service
Subject: RE: A058608709

CAUTION: This email originated from outside of the organisation. Do not act on instructions, click links or open attachments unless you recognise the sender and know the content is authentic and safe.

Dear Sir,
I refer to the following
“AA Insurance is a member of the Insurance Council of New Zealand and adhere to the Fair Insurance Code, which provides you with assurance that we have high standards of service for our customers. A copy of this code is available at”

I now refer to the correspondence below and advise that this policy premium has been paid today as I still want to keep the car in good working order (regular monthly run as detailed below)

However the payment is made with the proviso that I do not consider this matter to be resolved.

I note in recent Newspaper articles that other Insurers are offering premium discounts and other flexible arrangements during this weird period

Please consider this to be a complaint under the code as I do not believe that AA insurance is acting in good faith over this matter and need a satisfactory resolution that is fair and equitable.

Please refer this issue to a Senior Manager and advise me whom I will be dealing with for this dispute resolution.

Kind Regards


From: AAI General Claims Queries NZ []
Sent: Tue, 14 April 2020 10:08
To: 'xxx
Subject: RE: A058608709

Dear Mr xxx

Thank you for your email.

I would like to clarify that you can change your cover to any other type you wish or even cancel the policy for the time being altogether.
We suggest to change it to Third Party, Fire and Theft to ensure that your car is fully covered will not being driven but do not offer a discounted Comprehensive cover for the duration of the lockdown.

We only write a vehicle off if the car is not economical to repair or it is not safe to do so. While I can understand your frustration with the current situation, the lockdown requirements are out of our control and we will do our best to get the vehicle repaired as fast as possible once the repairers are open again.

Kind Regards,

Thomas Huber
Customer Manager

Call me on 07 834 3887 Email me at Visit us at
AA Insurance Limited | 130 Ellis Street, Frankton, Hamilton 3204 | PO Box 992, Shortland Street, Auckland

Sent: Monday 13 April 2020 3:43 PM
To: AAI General Claims Queries NZ
Subject: A058608709

CAUTION: This email originated from outside of the organisation. Do not act on instructions, click links or open attachments unless you recognise the sender and know the content is authentic and safe.

Dear Sir,
I refer to earlier correspondence (copied below for completeness) and a telephone call from Sarah on the 6th April 2020 regarding this claim.

The only offer that was made was to degrade the coverage to third party fire and theft, and on consideration, I find that solution unacceptable on the basis that the car is unusable for day to day use.

I also do not consider this to being a “considered response” as requested regarding this claim and the dilemma we are in.

All the other options proffered by myself were “too hard” and I suggest we need to use some initiative and common sense to come to a “fair and equitable” solution.

It would be remiss of me not to mention that the car insurance industry is probably profiting from this “Lockdown” situation.
Your risk exposure has been greatly reduced nationally, and in my particular case is just about 0%.

I personally think the most expedient thing to do is write the car off and I can source something I can use.

Repairs can be made by your good selves when things re-open and the vehicle can then be on-sold.

The other option (and least preferred) is that AA Insurance offer a heavily discounted comprehensive insurance policy premium until the repairs are completed.
This is on the basis of the low risk exposure and the fact that I cannot use the car on a day to day basis.

I look forward to your “considered response”

Kind Regards



Apr 1, 9:58 PM NZDT
Dear Sir,
I have a problem and we need to figure out an fair and equitable solution.

This car has an unfixed claim on it (Reference A 058 608 709), while the car is driveable, I am not using it as has a hole in the roof where the aerial used to be.

While I have taped it up, I don’t want to risk the car getting wet and thus damaging the interior lining etc (Under the Policy conditions my obligation to minimise further damage)

I take it out about once a month (on a sunny day) to give it a run and check tyre pressures etc.

We have a second car (Mitsubishi Mirage xxx) which is also insured by your good selves, that we now use on as our prime transport

(Under my Partners name xxx)

So, The conundrums we have are as follows;

• I Have a car that should not be used (Technically it has “structural” damage)
• The WOF expires at the same time as the Insurance renewal (But probably will not pass because of structural damage)
• The WOF cannot be renewed anyway because of COVID 19 Lockdown
• The Car cannot be fixed because of the current lockdown from COVID 19, - Harewood Panel and Paint were waiting for parts just before the lockdown, I do not know the status of delivery of such.
• The accident occurred on the 7th Feb 2020, so now have been without a car for nearly 3 months
• My Partner is not driving at the moment due to medical issues
• I Have two cars and only one Driver
• This claim to xxxx is the first “At Fault” one I have had in 52 years of driving –caused by a faulty garage door limit setting – now fixed

So clearly we have to figure out a compromise, as I am reluctant to Pay an Insurance Premium on a Car (xxxx) that cannot be used/repaired

1. Organise a combined Policy that includes both cars
a. One Driver (xxxxxx), until the repairs are completed and/or yyyy Medical issues are resolved
b. Confirm that xxx is still covered due to the issues described above until repaired. (WOF etc)
2. AA Find a Panel beater that can fix the Car
3. AA Cover xxxx Insurance at no cost until the repairs are completed
a. On the basis of occasional use as described above
b. Cover is still Valid until Repairs/WOF can be renewed
4. Write off the Car and come and collect it on the basis
a. It has been waiting for a repair since the report date of the incident
b. It is technically unusable because of the structural damage
5. AA’s Other solution?

Option 3 is not my preferred option as this COVOID 19 shutdown could go for weeks and the car is getting devalued by the day with no use.

I await your considered response to this issue in these weird times

Kind Regards


james w.
26 Apr 2020
car insurance premium reduction

I have 5 cars, all insured with Ami. 4 are off the road during lockdown, 3 are high (young person) premiums. AMI told me 2 days ago they were not going to reduce or refund any premiums.

Linda B.
26 Apr 2020
Vehicle insurance

Well done on your research on discount from insurers
I rang Covi insurance about our campervan insurance which costs us nearly $1200 per year but no they are not discounting - we also have a car insured with them.
We can't go away in the campervan while in lockdown and we haven't driven the car for 5 weeks!!
Bit unfair really!!