Car Insurance in New Zealand

There are many options when choosing a car insurance policy. Read below why you need to find what is the best car insurance policy for you.

The unexpected can happen. Car insurance is there to protect you financially if you have a crash. This means the insurer pays to fix some or all of the damage you’ve caused. Most policies also cover you if somebody steals your car.

Insurance covers some situations but not others. Before buying a car insurance policy, you should know a few of the basics, such as what events car insurance policies cover, and the different types of car insurance policies.

Types of Car Insurance Policies

There is a range of car insurance policy types available in New Zealand, starting from only covering crash damage to other people’s cars and stuff, up to a fully comprehensive policy. Here we talk about the three big categories starting from the lowest level of cover.

  1. Third Party policies cover you against the damage that you cause to another person’s car or other property in a car crash (fences for example). These policies don’t cover damage to your car if you crash it.
  2. Third Party Fire & Theft policies are an extension of standard third party policies meaning they cover everything in a third party policy plus more. A Third Party Fire & Theft policy will additionally cover fire damage and the theft of your vehicle.
  3. Comprehensive car insurance covers you for damage to your motor vehicle, as well and the damage to other people’s property.

These explanations are very simplified. Each car insurance policy in New Zealand differs slightly, and to understand what the policies cover it pays to read the insurer’s policy document.

What is a Car Insurance Policy Excess?

As with most insurance products, car insurance policies in New Zealand have an excess. Your excess is the amount you are required to pay when you make a claim.

In a simplified example, if your car insurance policy has an excess of $300, and the damages bill for your incident is $7,000, then it is your responsibility to pay $300 when making a claim, and the responsibility of your insurance company to pay the remaining $6,700.

Adjusting the excess on your policy is one of the simplest ways to get cheaper car insurance premiums. If you are confident in your driving ability or can afford to pay more in a crash, you can increase your excess. This means you pay slightly more in the event you need to make a claim but results in your monthly premiums decreasing.

What should I do if I have an accident?

First, make sure all the occupants of your vehicle are safe, then check on the occupants of the other vehicle and anyone else involved if it is safe to do so. If needed, call any emergency services to assist in the situation.

Once the drivers and passengers have been taken care of, write down the incident details. This should include the name and contact details of any other drivers, their registration details, and also the names and contact details of any witnesses.Taking photos of the scene and the damage is also helpful if you can.

Then you can contact your insurance company. They will be able to take you through the process of filing a claim, and requesting any additional details they need to process it in an efficient and timely manner.

Do I need Car Insurance?

Unlike in some countries, car insurance is not mandatory in New Zealand, and for this reason some people find it tempting to ignore.

Even if your car is cheap, you can still cause tens of thousands of damage to other people’s cars and property. If you crash into a Porsche, fixing it becomes your responsibility!

Purchasing car insurance provides you with peace of mind knowing that your insurance company is there to support you should you be involved in an accident. Car insurance is beneficial for all types of drivers:

  1. New drivers – In most cases buying car insurance should be the first thing you do after purchasing your first vehicle. We’ve heard many horror stories of accidents occurring on the way home, or cars being stolen before people have organised insurance.
  2. Experienced drivers – Even if you are an experienced driver, there is always the possibility that something can go wrong. Whether it be as small as backing into another car in a car park, or being involved in a more serious accident, there is always the possibility that you slip up & need insurance. Insurance can also protect you in the case where you are involved in a crash with an uninsured driver which isn’t your fault.
  3. Backpackers – When renting a car or motorhome in New Zealand, most rental operators will offer insurance as part of the package (it may be included by default, or offered as an optional extra over and above the base rate of renting the vehicle). However if you are planning to spend a few months in New Zealand and purchasing a car while you’re here, it will be a good idea to at least investigate the cost of insuring your vehicle. Depending on the length of your stay, you will need to consider the term of the policy, and whether it is offered as a monthly policy, or annual policy.

The content presented on this page is provided for informational purposes only. Cove Limited makes no representations or warranties as to the accuracy, completeness or timeliness of the information. Each person should consult a qualified advisor for advice specific to their circumstances. Cove Limited assumes no liability for actions taken in reliance upon the information contained herein.

Sound good?

Let's get you signed up for early access