Learn how to choose the best policy for you and your family, plus how to save on premiums.
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.
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.
Ask about any other discounts, such as:
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.
The premiums listed are for comprehensive policies and include no-excess windscreen cover.
We’ve made these assumptions:
Some companies offered discounts if:
We accepted these discounts.
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.
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.
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.
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: