Whatever type of car you own, your car is probably a vital tool to get around day-to-day. Protecting your car with a suitable car insurance policy can help protect you if the unforeseen happens and your car is stolen, damaged or you are involved in an accident.
This guide will explain what you should consider to make an informed choice about the best car insurance policy for you.
Top things to know about car insurance cover in New Zealand
Car Insurance costs can vary widely depending on the type of policy you choose, and the provider you choose. Costs will also vary depending on the age and model of your car, so it’s worth taking some time to request some online quotes to make sure you’re not paying more than you should for your car insurance. We’ve outlined how to request a car insurance quote, information your insurer will look for, the main types of insurance cover, and some tips to reduce the cost of your car insurance.
Compare car insurance quotes with our top insurance partners
- At Money Compare we are here to help you make an informed choice about home insurance – we work with some of New Zealand’s top insurance companies.
- We recommend requesting quotes from more than one providers, so that you can compare the costs side-by-side.
- Requesting a quote online is fast and easy – it only takes around 10 minutes to collect two or three quotes.
- Switching insurers can help save you money – most insurance companies offer attractive deals for new customers.
- We recommend comparing insurance quotes and reviewing your policy every year to ensure the information in the policy is current, and that the cost remains competitive.
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A Comprehensive Comparison of Car Insurance Levels in NZ
When it comes to insuring your vehicle in New Zealand, it's essential to understand the different levels of coverage available to you. The three main types of car insurance in NZ are fully comprehensive, third party, and third party fire and theft. Each option offers varying degrees of coverage and comes with its own set of pros and cons. In this article, we will delve into the specifics of each insurance level, enabling you to make an informed decision about the type of coverage that best suits your needs.
Fully Comprehensive Car Insurance:
Fully comprehensive car insurance provides the most extensive coverage available. It not only covers damage caused to third parties but also safeguards your own vehicle against accidental damage, theft, fire, and other potential risks. Here are the pros and cons of fully comprehensive car insurance:
Pros of Fully Comprehensive Insurance:
a. Complete Protection: Fully comprehensive insurance offers comprehensive protection for your vehicle and your financial investment. It covers repairs for both your car and other parties' vehicles involved in an accident.
b. Peace of Mind: This level of coverage provides peace of mind knowing that you are protected against a wide range of potential risks, including theft, fire, vandalism, and natural disasters.
c. Added Benefits: Some comprehensive policies include additional benefits such as roadside assistance, towing services, and coverage for personal belongings inside the vehicle.
Cons of Fully Comprehensive Insurance:
a. Higher Premiums: Fully comprehensive insurance tends to have higher premiums compared to other coverage levels due to the extensive protection it offers.
b. Deductibles and Excess: Depending on the policy, you may be required to pay a deductible or excess fee when making a claim. This out-of-pocket expense can be a disadvantage for some policyholders.
Third Party Car Insurance:
Third party car insurance provides coverage for damage caused to other parties involved in an accident, including their vehicles, property, and injuries. However, it does not cover your own vehicle in the event of an accident. Let's explore the pros and cons:
Pros of Third Party Car Insurance:
a. Cost-effective: Third party insurance is generally the most affordable option as it offers limited coverage compared to comprehensive policies.
b. Legal Compliance: Having at least third party insurance is a legal requirement in New Zealand. It ensures that you are meeting your legal obligations as a vehicle owner.
Cons of Third Party Car Insurance:
a. Limited Coverage: While third party insurance protects other parties involved in an accident, it does not cover repairs or replacement costs for your own vehicle. You may have to bear these expenses out-of-pocket.
b. Lack of Comprehensive Protection: Without coverage for your own vehicle, you may face financial challenges if it is stolen, damaged by fire, or involved in a non-fault accident.
c. No Additional Benefits: Third party policies usually do not include additional benefits like roadside assistance or coverage for personal belongings.
Third Party Fire and Theft Car Insurance:
Third party fire and theft insurance provides coverage for damage caused to other parties, as well as protection against fire damage and theft of your vehicle. Here are the pros and cons:
Pros of Third Party Fire and Theft Car Insurance:
a. Mid-level Protection: Third party fire and theft insurance offers a balance between affordability and added coverage for specific risks, such as fire damage and theft.
b. Protection against Theft: This insurance level provides financial coverage if your vehicle is stolen or if it incurs damage during an attempted theft.
c. Legal Compliance: Similar to third party insurance, third party fire and theft insurance fulfills the legal requirement of having at least third party coverage.
Cons of Third Party Fire and Theft Car Insurance:
a. Limited Coverage: While it includes protection against theft and fire damage, it still does not provide coverage for accidental damage to your own vehicle or additional benefits.
b. Out-of-Pocket Expenses: In the event of an accident or fire, you may still be responsible for covering the cost of repairing or replacing your own vehicle.
So how do you choose the right insurance?
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Selecting the right level of car insurance in New Zealand is crucial for safeguarding your vehicle and ensuring peace of mind on the road. Fully comprehensive insurance offers the most extensive coverage, providing protection for your vehicle and third parties. Third party insurance is a more affordable option, but it lacks coverage for your own vehicle. Third party fire and theft insurance strikes a balance, providing added protection against fire damage and theft. Consider your budget, vehicle value, and risk tolerance when choosing the right level of coverage, and always review policy details and exclusions before making a decision.
How to request a car insurance quote online
It will help to have the following detailed ready to get the most accurate quote possible:
- Vehicle license, or the make the make, age and model of your car
- Age of driver(s) and licence info
- Distance driven per year
- Whether the car is for private or business use
- Where the car will be store, eg: garage, car port, driveway or road
- Your accident and claims histoy
- How much you want to insure your car for
The main types of car insurance in New Zealand are:
- Comprehensive Car Insurance: covers you if your car is stolen or damaged in an accident. It also pays out to other people if your car damaged their vehicle or property. This is typically the most expensive policy available but also provides the most cover. Comprehensive Car Insurance is generally a good option if you want peace of mind, and if your car is expensive enough that you couldn’t afford to repair or replace it.
- Third Party Car insurance: is the most basic and cheapest form of car insurance. You are only covered for damage you may cause to a third party, but not for any damage to your own car. This is the best option if you own an older car, or a car with little value.
- Third Party, Fire & Theft Insurance: provides third party cover, and also covers you in the event of a fire, or if your car is stolen and needs replacing. This type of policy does not cover repairs to your car, even if you are not at fault for the car accident.
Tips to reduce the cost of your car insurance
- Shop around: if you want cheaper car insurance, it pays to shop around before you buy. Car insurance is a competitive industry, so there are some good deals around – but beware of insurers who trim policy benefits in order to offer cheaper premiums
- Check policy benefits – not just price: make sure your policy includes all the benefits that you need. Also, only add benefits that you need as these will increase the cost of your insurance.
- Choose a level of cover that meets your needs and matches your budget
- Increase your excess: This is the amount of money you have to pay when you make a claim, before the insurer covers the rest of the cost. Increasing your excess sometimes results in your premium being reduced.
- Pay annually: Paying for your policy annually instead of monthly, can work out cheaper. So it’s worth checking whether there is a price difference for paying annually.
- Ask about discounts for multiple policies: some insurers offer discounts for multiple policies with the same insurer (eg: car insurance or contents insurance), or for professionally installed security systems