Summary of Car Insurance

• Policy costs vary widely - for the two vehicles we sampled, we found Trade Me Insurance (underwritten by Tower) to be the best overall value at an average of 30% below the market average, despite charging $100 more for excess on a claim. Cove Insurance, with a $100 lower excess, offers similar policy prices to Trade Me when the excess difference is considered.
• In every instance, what you pay for vehicle insurance will vary by model and driver specs - those who spend 10-15 minutes pricing all the insurers online can most likely find a deal among the providers.
• Comprehensive car insurance is almost always more expensive than third party, and is a popular choice for a vehicle worth more than $2,000. However, Comprehensive is generally a good choice if you can’t afford to repair or replace your car yourself.
• Our research proves that where you live is a major factor in what you'll pay - policies for the same car in Auckland can cost twice as much for those in the regions 
• If you live in an area known for bendy roads you might pay even more - it's essential to shop around as some insurers don't discriminate and their quotes will save you money.
• Many Kiwis over-insure their car when it comes to 'market value' in the event of a claim the insurance company will write off the car if the cost of repairs are more than the current market value of the vehicle as determined by the insurance company. For example those holding policies stating a $10,000 estimated 'market value' may only receive $6,000 if the car is written off.
• 'Agreed value' as a payout is an alternative popular option whereby you and the insurance company agree in the policy the amount to be paid out if the car is written off.
• Young driver insurance continues to be expensive as insurers perceive newly qualified drivers as the highest risk
• Paying for car insurance annually instead of monthly is always cheaper, sometimes by as much as 15%
• If you sell your car and have prepaid insurance for 12 months, it's one phone call to your insurer to get a refund for the days of cover you don't use.
• Claiming is an easy process, but hundreds of people lodge complaints every year about their claim being declined. To reduce the chance of this happening, it's essential to read and understand your policy as to what you are covered for, and for what you are not covered for. 

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New Zealand's Definitive Guide to Car Insurance
The cost of insuring a car in New Zealand continues to climb well above inflation. In this guide, we explain the basic principles of car insurance and outline several tips to keep your policy cost down year after year. New Zealand does not require car owners to have car insurance by law – our view is that not having at least third party car cover is a risk that could severely affect you financially if you cause an accident.

Our Guide Covers:

• What is Car Insurance?
• Cheap car insurance – best buys to save you money
• Explaining the terms such as 'excess', 'comprehensive' and 'no-claims bonus'
• Applying for a quote and the need for full disclosure
• 20 simple tips for cutting your car insurance costs
• New Zealand's most stolen cars
• Understand 'Agreed Value' and 'Market Value'
• Making a claim – protect yourself and get a faster pay-out
• 6 reasons why car insurance claims get declined
• Your rights if your claim is rejected​​ ​

There are two types of car insurance, 'Comprehensive insurance' and 'Third party insurance'.

1. Comprehensive car insurance specifically covers you if your car is stolen or damaged in an accident. It also pays out to other people if your car damages their vehicle or property.
2. Third party car insurance only pays out to others, but does not cover your own car. This means if your car is stolen or involved in an accident, anyone affected other than you will be covered. ​

Car insurers take into account a lot of data to decide what price to offer, including:

• Your age
• Your gender
• Your car accident history
• Your location
• Your car model and year
• Where your car will be stored
• Whether your car will be used for work purposes, or for personal

High Risk, Higher Price 

• The riskier you are to an insurer, the higher the cost of your car insurance premium.
  
• If you are a middle-aged woman with no accident history driving a Toyota run-around to and from work in Dunedin, you’ll pay less than a newly licenced 'boy racer' with a modified Mitsubishi in Auckland.
  
• If you can prove you are low risk by being accident free and having secure parking for your car, you will save more. 

We asked for quotes for a 2011 Toyota Corolla and 2017 Toyota RAV 4 among all the insurers for locations all over New Zealand. From flat wide road Invercargill to the sharp corners of Piha, we asked for agreed-value quotes for towns and cities all over the country.

Our results:

• Trade Me Insurance offered the best value policies if the vehicle owner is a Trade Me member (20% discount), while AA Insurance was the most expensive insurer for the samples we made - please note that every vehicle and driver is different, so this is not an indication of the market in general.
• Cove Insurance, backed by insurance giant Lloyd's of London, offered highly competitive quotes and policies could drop even further if the car value decreased. 
  
• Excess was $400 for all insurance, other than Trade Me Insurance ($500)
• Policies did vary for small things like replacement car and glass damage, so understanding what an insurance policy covers before you buy it is essential. With Cove, for example, glass cover was an additional $50/year.
• Invercargill and New Plymouth were the cheapest locations for insurance, with Auckland being the most expensive for the quotes we obtained.

BEST BUY 2
Vehicle: 2017 Toyota RAV4, no car alarm, parked off street but not in a garage
Cover: Fully comprehensive
Car insurance quotes for a 35 yo male driver, no accident history and holding a full licence since 2004

• Drives approx 6,000 KM/year
• Private use
• Primary driver holds a full licence
• Primary driver is a 35yo male
• Comprehensive insurance quoted
• $30,000 insured value -  (AA Insurance is the only insurer who would not allow an agreed value of $30,000, mandating $35,000 as the minimum)
• Download our table in PDF format

Understanding terms like 'excess', 'third party' and 'comprehensive' is essential for navigating car insurance as we explain below. 

An insurance excess is a fixed dollar amount you will pay if you make a claim. For example if your excess is $400 and your claim for an accident is $1,000, you will pay $400 and your insurer will pay $600. When deciding on a policy, it’s a rule that the bigger the excess, the cheaper the cost. But if you will really feel the pinch of a $500 excess, it may be worthwhile considering a lower excess. This will ensure any claim can be quickly processed while avoiding another stress of getting money to cover the excess.

It’s really important to know the difference between each type of car insurance so you only buy exactly what you need.
 
1. Third party
Third party is usually the cheapest car insurance option and is limited to protecting everyone you share the road with (other cars and property like fences, walls and houses walls) from you if you cause an accident while driving. Third party insurance pays out for anyone affected by your accident, but not your own car or any damage done to your own property. For example, if you hit your own house with your car, you’re not covered. Third party is most suitable for anyone with a low-value car (less than $2,000 market value) who can afford to repair or replace it quickly in the case of an accident.
 
2. Third party, fire and theft
Third party, fire and theft car insurance is similar to third party insurance but extends to cover your car if it catches fire or is stolen. If your car isn’t worth much and you believe you’re a safe driver but don’t want the inconvenience and expense of buying a new car if it gets stolen, this cover may be more suitable than third party of comprehensive.  
 
3. Comprehensive
Comprehensive car insurance offers the most cover, specifically damage to your car, other cars and any property from accidental damage, certain car faults and in some cases windscreen issues.

A no-claims bonus is a discount you can receive on your insurance premium if you don’t make a claim.

You are only eligible for a no-claims bonus if you stick with the same insurer year after year as you’ll build a history with them. Some insurers have introduced 'Lifetime No-Claims Bonuses' which can offer up to 65% premium discount if you don’t make a claim in your first year. If you make a claim, you’ll lose your discount in the following year and will need to build up a claim-free history to qualify for a no-claims bonus again. 

Generally, you will receive a no claims bonus if you have not had any claims or if you were involved in an accident, you identified the party at fault (i.e. name, address, phone number, make, model, registered number of that other party’s vehicle), and could prove that the other party was more than 50% at fault.
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Some insurers, such as AAI, no longer offer no claims bonuses, instead choosing to automatically qualify customers for discounts rather than asking additional questions. 
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Car insurance and lies mix like oil and marine life. If you get caught out, they’ll sink you. Our position is simple - be completely honest when applying for insurance. Don’t alter facts when it comes to driving habits, location and accident history. Don’t be tempted to give another address to save money (i.e. the North Shore is cheaper than Piha) or to forget to mention an accident you caused but didn’t claim on with another insurer. It’s not worth the risk.

For example, when an insurer asks "in the last 3 years how many vehicle-related incidents have you had?” don’t answer none if you did have an accident even if it wasn't your fault. If you later cause an accident and the cause is traced back to a fault in your car from the first accident, your insurer may refuse cover.

Car insurance can be considerably cheaper if you shop around but make sure you insure for the right amount. We have listed a few ways to price bust your premium and get full protection at the same time. 
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Own a Toyota Hilux, Subaru Impreza or Subaru Legacy and you could pay a lot more for car insurance than less 'in demand' models by thieves. 

MoneyHub obtained stolen car data from the New Zealand Police to reveal the 25 most stolen cars and which areas of New Zealand are prone to more theft. 

If you own a car on any of our lists below, be aware that you may more than you realise - with Subaru Legacy and Subaru Impreza models often being relatively more extensive to insure. 

1. Get the important details you need to make a claim
If you are claiming for any type of traffic accident, there are six essential details you will need from the other driver:

1. Name
2. Address
3. Vehicle registration number
4. Telephone number
5. Names of any passengers
6. Insurance details

It's also helpful to take photos of the accident if you can, even if it's dark, as long as it is safe to do so.

2. Call your insurer
Phone your car insurer immediately after getting the above details confirmed - the longer you wait, the less helpful it is to the insurer's claim process. You will also need to explain the accident in detail, informing them of:

1. The location of accident - road names etc
2. Weather conditions - i.e. Sun, rain, snow, ice or fog
3. Light conditions - i.e. Daylight, dawn, dusk or dark
4. Road conditions -  i.e. wet, dry, ice or oil on road
5. A full description of accident - in detail, including the speeds of all vehicles, any obstructions (i.e. parked cars) and/or bends in the road.

3. The Claims process
Many insurers will assign you a claim/customer manager when you first call them about the incident. The claim manager is one person who will handle your claim from your first call to payment. In some cases you may have to complete a claim form in writing, but this is happening less and less. 

Even if you don't think you will claim on your insurance for an accident (i.e. in cases where the damage is minimal), you should still notify your insurer.

4. Do I have to contact my insurer?
Car insurers expect to be notified of any incident that could potentially lead to a claim - even if you don't plan to make one. Not doing so may violate your car insurance policy's terms and conditions as you are not disclosing a 'vehicle-related incident'. Insurers rely on full disclosure of  vehicle-related incidents when calculating the cost of your policy when you renew your car insurance. Furthermore, there is a risk that an accident damages your car, affecting its safety and/or value.

5. Should I make a car insurance claim or pay for the repairs myself?
This depends on the scale of damage and whether or not you want to pay for the repairs yourself.  It's perfectly normal to think twice about making a claim if you think your premium will increase next time you renew. Before you make a decision, contact your insurer - most insurers are able to tell you how much your premium will increase by or give you an average amount. Minor issues like chipped windscreens or an uninsured driver backing in to you won't spike your premium like causing a serious collision would.

​Whatever you decide, be vigilant around renewal time - if your insurer quotes a higher price, consider switching insurers and/or asking your current provider for a better price. ​

The Insurance and Financial Services Ombudsman (IFSO) receives hundreds of complaints from dissatisfied car insurance policy holders who have had a claim declined. To reduce the chance of this happening to you, it's essential to read and understand your policy. Also, the IFSO confirms that non-disclosure continues to be an ongoing issue for consumers and a frequent reason why claims are not met.  It is essential consumers tell insurers absolutely everything when arranging any insurance and at annual renewal.

1. You didn't take enough care
If you leave your car unlocked and it gets stolen, you have failed to take 'reasonable care' and a claim for theft will be declined. 

2. Your car was unsafe
If your car doesn't have a WOF and you cause an accident which was caused by a defect in your car (i.e. dodgy brakes), your insurer is unlikely to pay out. 

3. You were drinking
Insurers are very sensitive to alcohol, and will outright decline claims if you were under the influence of alcohol. If you had a drink before an accident, you must disclose everything so they have all the facts. A glass of wine two hours before an accident is unlikely going to be put you 'under the influence'. 

4. You did not comply with the conditions of the driver’s licence
For example, if you are on a learners or restricted licence and have unlicensed passengers in the car, any claim will be refused. The same goes for any unlicenced driver. 

5.  You have private-use car insurance but you use the vehicle for business purposes
This is a big no-no and a common reason for insurance claims to be refused. If you start moonlighting for Uber, your existing person insurance will not cover you. 

6.  You failed to mention something important - such as a previous accident, criminal conviction or licence disqualification
These factors may cause your policy to cost more, but they're essential for your insurer to know. 

If you believe you have a genuine claim that your insurer refuses to pay out, re-read the terms and conditions of your policy again and cross-check it to the reason(s) your insurer has given for denying the claim. If you have been rejected and you think it's unfair, appeal it by doing the following:

• Jump on the phone and explain why your claim meets the T&Cs of the policy you bought.
• If they don't agree, you can lodge a complaint with the Insurance & Financial Services Ombudsman Scheme which resolves disagreements between customers and their insurers.
• Their free-of-charge service will make the final decision about your claim and order the insurer to pay out if they find in your favour. 
• If your insurer isn't a member, you can complain to Financial Services Complaint Ltd who follow a similar process.