Car insurance policies

Man taking notes next to damaged vehicle

Find the best car insurance for you.

Our insurance satisfaction survey also tells you which company has the most satisfied customers – and which ones score lowest.

How should you choose a car insurer? We recommend the following steps:

  • Look at what you’re paying. Then use our premium comparison tool to see how your insurer’s prices compare with other companies’.

  • Check out insurers’ customer satisfaction scores. We’ve got scores for 12 companies from our survey of more than 6000 Consumer NZ members.

  • Consider bang for buck. Our policy database lets you compare the cover offered by 17 comprehensive car insurance policies.

  • Get quotes from at least three insurers. The price you get depends on your age, gender, car, driving history and where you live.

  • Take the time to read the policy before signing up. The worst time to discover the limitations of a policy is after you make a claim.

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The basics explained

Learn about the different types of cover, what an excess is and the difference between agreed and market value.

Find out more

About our survey

We asked insurance providers to quote monthly premiums for 4 profiles: young person, middle-aged person, older person and family of 4.

  • Young person - age 23 and wants to insure a 2006 Toyota Corolla GL for $5750.
  • Middle-aged person - age 45 and wants to insure a 2012 Honda Civic for $18,250.
  • Older person - age 70 and wants to insure a 2010 Mazda Axela for $12,500.
  • Family of 4 - consists of dad (50), mum (50), son (19) and daughter (17). They own a 2012 Subaru Outback Premium worth $25,000.

The premiums listed are for comprehensive policies and include no-excess windscreen cover.

We’ve made these assumptions:

  • Our drivers are fully licensed – except for the son and daughter in our family of 4 (they hold restricted licences).
  • None of our drivers has been convicted of a driving offence.
  • None of our drivers has made a claim in the past 5 years.
  • The cars are fitted with alarms and usually parked in a residential driveway. They’re not modified or used for business purposes.
  • Apart from our young person and the teenagers in our family of 4, no one under 25 will drive the cars.

Some companies offered discounts if:

  • No unnamed drivers under 25 drove the car.
  • Only those named on the policy drove the car.
  • The drivers had been claim-free for a certain number of years.
  • The car had an alarm.

We accepted these discounts.

Where to get the lowest premiums

The lowest premiums for our young driver were split by gender – young men wanting a well-priced option may want to compare quotes from MAS and Trade Me, whereas young women may pick up a better deal at The Co-operative Bank or BNZ.

Youi offered the cheapest premiums for our middle-aged car owner in Auckland, Wellington and Dunedin, though the company’s $600 excess was higher than its competitors.

Trade Me offered the most affordable insurance policies for our 70-year-old across all five cities.

FMG and Westpac had the cheapest premiums for our family of four, though both policies were for market, not agreed, value cover.

While the latter pays out an amount agreed between you and the insurer after a total loss, the former only covers the value of your car if you’d sold it on the market immediately before the damage.

Premium comparison

GUIDE TO THE PREMIUMS OUR SURVEY took place between June and July 2018. The cover we asked for is outlined in “About our survey”. EXCESS is the standard excess for each age group. Excess rates for adults and teenagers are shown by A and T, and M and F for males and females. MONTHLY PREMIUMS A ANZ premiums were calculated from its online Quick Quote tool, which provides a starting estimate. B Premiums include a Trade Me membership discount. C TSB is currently reviewing its pricing. D Agreed and market value premiums cost the same. E Premiums based on an agreed value of $5915. AA Insurance, ANZ, AMP and Warehouse Money’s premiums were collected through the insurers’ websites and feature a different start date from the other companies that provided premium information. Kiwibank and Vero declined our request for premium information and do not provide online quotes.

Which company has the most satisfied customers?

Don’t make your decision on insurer based on price alone – customer satisfaction is equally important. Saving a few dollars a month isn’t worth the hassle of poor service after you’ve experienced a stressful accident.

To gauge insurers’ customer service, we asked our members to rate their car insurer. More than 6000 gave us their thoughts.

Several insurers had a high proportion of very satisfied customers, including MAS (92%) and FMG (83%).

In contrast, Tower (46%) and Lantern (49%) policyholders were less likely than the average to be very satisfied with their insurer.

Insurance providersOverall satisfaction[bar]
MAS 92%
FMG 83%
AA Insurance71%
AMP65%
Westpac58%
State Insurance58%
BNZ57%
AMI Insurance57%
ASB Bank50%
ANZ Bank50%
Lantern Insurance49%
Tower Insurance46%
AVERAGE61%

We didn’t get enough responses from members with The Co-operative Bank, Trade Me, TSB, Warehouse Money or Youi to gauge satisfaction.

In 2016, Youi was ordered to pay $320,000 after its sales tactics were found to breach the Fair Trading Act. Some customers seeking quotes were issued policies they didn’t expect or want.

Ways to save

After some simple ways to save on your premiums?

Voluntary excess increase

Some providers will lower your premium if you take on a higher excess. If you do take a higher excess, don't make it higher than you could comfortably afford to pay if you had to make a claim.

No-claims discount

Most policies offer a no-claims discount on your premiums. This is “stepped” – the more years without a claim, the higher the discount – and you can reach a maximum discount of around 60 to 65% after 4 or 5 years of claims-free motoring. The discount can save you hundreds of dollars on your annual premiums.

Your no-claims discount won’t necessarily be affected if you have to make a claim. For instance, most providers won’t penalise you if you’re not responsible for a crash and you can supply the other driver’s registration and contact details. Claims for broken windows and lost keys aren’t always tied to the discount either.

Other discounts

Ask about any other discounts, such as:

  • Having other insurance policies with the company can save you up to 20%.
  • Having an alarm fitted.
  • Parking your car in a garage.
  • Restricting the policy to named drivers.
  • Being over a certain age.
  • Paying an annual premium by direct debit.

Bargaining

If you like your existing company but it's not cheap, try bargaining – ask if it will match another's quote before deciding whether to leave.

Worth claiming?

Making a claim for minor damage can affect your no-claims discount. You may be better off paying the repair bill.

Major windscreen crack

Middle-aged male driver, Auckland

Repair bill: $600
Your excess: $400

If you have excess-free glass cover, insurer pays: $600
Effect on no-claims bonus: Nil.
Is it worth claiming? Yes. Your repair bill will be taken care of and your premiums should be unaffected.

If you don’t have excess-free glass cover, insurer pays: $200
Effect on no-claims bonus: You haven’t made a claim for more than five years. The new claim knocks two years off your no-claims bonus. This may cost you an estimated $550 in extra premiums over two years.
Is it worth claiming? Probably not. In the long run, you could be $350 worse off if you make a claim.

Car door dent

Older female driver, Dunedin

Repair bill: $1000
Your excess: $400 Insurer pays: $600
Effect on no-claims bonus: While you were claim-free for years prior, you were the at-fault driver in a minor fender bender 12 months ago. This second claim knocks another two years off your no-claims bonus, reducing it from 50 percent to 30 percent for the next year and to 40 percent for the second year. This will cost you an estimated $975 in extra premiums over two years.
Is it worth claiming? Probably not. On balance, you may be $375 better off if you can pay the full bill yourself.

GUIDE EFFECT ON NO-CLAIMS BONUS are estimates based on our middle-aged and older driver profiles as detailed on the following pages and 2018 premium information provided by ASB, which offered mid-range premiums. Scenarios relate to damage where the policy-holder is at fault. Calculations do not take into account annual premium or vehicle valuation adjustments.

After an accident

  • Check the driver of the other car is OK.
  • Don’t admit liability for the accident.
  • Get the other driver’s details including his or her name, address, phone number, car registration and insurance company.
  • Write down the name and phone number of anyone else who witnessed the accident.
  • Note down other particulars about the crash such as the time, location and chain of events.
  • Take all reasonable steps to prevent further loss or damage to your car.
  • Hang on to damaged property in case your insurer wants to inspect it.
  • Notify the police as soon as possible (and within 24 hours) if someone was hurt in the accident and required medical attention.
  • Contact your insurer as soon as possible following the crash.

Be reasonable

Insurance policies for your house, contents, car or travel contain a clause that reads “you must always take reasonable care to avoid circumstances that could result in a claim” or words to that effect.

To decline a claim under a clause for reasonable care, your insurer must prove you were grossly careless, negligent or reckless. It can’t decline your claim for run-of-the-mill carelessness. The Insurance and Financial Services Ombudsman (IFSO) said “this is because insurance, by its very nature, protects the insured against negligence and mere inadvertence”.

So how does an insurer prove gross negligence? According to IFSO, it looks at the circumstances leading up to your loss and asks “would a reasonable person have run the same risks?” If the answer is “no”, it can decline your claim.

In addition, the benchmark for “reasonable care” depends on circumstances such as where an item was left and for how long. There’s a difference between leaving your baggage unattended in the locked boot of your car for 10 minutes and leaving it on the passenger seat overnight.

With this in mind, you can challenge your insurer if your claim is declined for failing to take reasonable care. All insurers must belong to an independent dispute resolution scheme such as IFSO or Financial Services Complaints Limited. If you and your insurer can’t settle the dispute, you can refer it to the applicable service.

Caught asleep at the wheel

When a disagreement arises with a car insurer, policyholders may turn to the office of the Insurance and Financial Services Ombudsman (IFSO) Karen Stevens to resolve a dispute. Last year, nearly 1000 vehicle owners contacted the office with car insurance issues. We asked Ms Stevens for her advice on reducing the risk of a claim being rejected. Here are her tips:

  • Review your policy. “Ask yourself: do you understand the policy and what you are – and aren’t – covered for? People often think they have agreed value comprehensive policies when they have market value. So they have an accident and their car is written off, they think they will get the $20,000 cover that was on the original application, but they only get what the car would have sold for prior to the incident, $10,000.”
  • Check the listed value. “For agreed and market value policies, make sure the ‘sum insured’ is realistic – this may affect your premiums. If you disagree with your insurer’s valuation when setting up your policy or making a claim, get your own independent valuation.”
  • Disclose everything. “When applying for insurance, answer all questions and provide accurate information. When you renew your policy you must tell your insurer if anything has changed in the last year, including any convictions, or if you modify your vehicle. Claims can be declined if you haven’t told the insurer all the information you are required to.”
  • Obey the road rules. “Comply with your licence and don’t drive under the influence. Insurance claims are likely to be declined if there is an accident while you (or a driver of your car) drive in breach of your licence conditions or under the influence of alcohol or drugs. This means that the damage to your, or any other, vehicle won't be covered by insurance. Make sure you warn all drivers about this (especially those without a full licence).”
  • Be truthful in claims. “Think twice before you exaggerate an insurance claim. The long-term consequences of insurance fraud are hard-hitting. Declined claims are the tip of the iceberg. If your insurance policies are cancelled, and your name is listed on the Insurance Claims Register, it can be difficult to get future insurance. This can be devastating, for example, if you’re trying to buy a house.”
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