Car insurance

Find out what you need to know when shopping for car insurance with our buying guide, then compare policies from our survey.

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We've surveyed 11 car insurance providers.

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

  • Look at what you’re paying. Then check our policy database to see how your insurer’s prices compare with other companies’. If you're not in need of comprehensive cover, check out our survey of third-party only and third-party fire and theft premiums.

  • Check out insurers’ customer satisfaction scores. We’ve got scores for 18 companies from our survey of more than 5000 Consumer NZ members and supporters.

  • 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.

The basics

Types of cover

Comprehensive policies cover your car if it’s damaged or stolen as well as the damage you cause to someone else’s car or property. They also offer extra benefits. For instance, they’ll cover the cost of towing your car to the nearest repairer or safe location following an accident, and provide reasonable costs to transport you home.

Third-party only policies cover you if you damage someone else’s car or property. They’re not designed to cover damage to your vehicle. That said, most policies offer a limited payout if an uninsured driver crashes into you and you’re able to supply their registration and contact details.

Based on our annual premium survey, a third-party only policy for an individual is about 3 to 4 times cheaper than a comprehensive policy.

Third-party fire and theft policies provide the benefits of third-party only policies plus they cover you if your car is stolen or damaged by fire. As this level of cover provides some protection for your car, you may get access to benefits not offered to third-party only policyholders (for instance, limited cover for contents in your car if you hold a fire and theft policy, but nothing if you hold a third-party policy).

See our third-party premium survey to compare premiums.

Agreed or market value

  • Market value policies cover the cost of your car immediately before the damage occurred. The payout is based on the amount a similar car would fetch on the retail market as determined by your insurer.

  • With agreed value policies, you and your insurer agree on your car’s value. Your insurer will pay the agreed amount if your car is written off provided you’ve met the policy’s terms and conditions. As your car’s value decreases with age, the agreed amount should be revisited whenever your policy is renewed. Agreed value policies give you greater certainty about the amount you’ll receive if your vehicle is written off.

Excesses

  • If you need to make a claim, it’s likely you’ll have to contribute the first few hundred dollars towards your car’s repair or replacement. This is called the excess.

  • Most policies come with a standard excess. Generally, insurers allow you to choose a higher excess in exchange for lower premiums or vice versa.

  • Younger drivers – or those on a restricted or learner’s licence – usually get stung with a higher excess. This can be as much as $1600 for a driver under the age of 21 with a learner’s licence.

What about the kids?

You should ask your insurer to list your children on your policy if they regularly drive the family car. This will usually mean a higher premium as young drivers are seen as a bigger risk. Depending on your insurer, you may also lose your “no under-25 drivers” discount.

But if you don’t get your children listed on your policy, you may not be covered if they crash your car. Alternatively, you could incur a sizeable excess. You can avoid this excess if you add cover for unnamed drivers.

Parents sometimes take out policies in their own names to cover cars typically driven by their children. This is a bad idea. If the insurer deduces you’re “fronting” for your kids, it can decline any claims and avoid the policy. You’ll be out of pocket – and you might find it difficult to get cover in the future.

How to save on premiums

Opt to increase your excess

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 five 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.

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.

Car insurance policy survey

Our survey of car insurers found you can make substantial savings by switching.

Read more