Compare Comprehensive Car Insurance & Find the Best Value Policy

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?
• Best car insurance – save money and get the most comprehensive cover
• Frequently asked questions
• ​Agreed value vs Market value
• ​Making a claim – protect yourself and get a faster pay-out
  
• What a standard car insurance policy excludes
  
• 6 reasons why car insurance claims get declined
• Conclusion
  

Our process:

1. ​To make this easier for New Zealand drivers, we’ve bridged the gap and added some content, but every vehicle and driver is different - we believe MoneyHub offers the most comprehensive price information currently available.
2. Be aware every driver has different circumstances, so we have not exhaustively tested a range of cars, drivers and location profiles.
3. Instead, we have compiled the quotes and policy information to raise awareness of the difference in prices and why it's essential to shop around and avoid auto-renewing without challenging the price first.

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. ​Our dedicated guide covers third party car insurance in detail. 

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. 
• Our guide to the cheapest cars to insure lists models which predominantly are compact in size, have small engines and are Japanese-made. The value of these cars (and the low risk nature of their drivers) makes them more attractive to insurers and therefore cheaper to insure.

Our Research Examples:
Quote Sample 1: Toyota RAV4 
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
• $28,000 insured value
• Download our table in PDF Format
  

Quote Sample 2: Toyota Corolla
Vehicle: 2011 Toyota Corolla, 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
• $6,500 insured value
• Download our table in PDF format

* includes 15% Trade Me membership discount

Useful guides to help you save

• Wanting to compare policies by benefits? Our AMI vs AA Insurance vs Cove vs State vs Tower vs Trade Me Insurance review has all the details.
• Considering a third party policy? This guide is not for you - our Third Party Car Insurance Comparison explains what you need to know.
• Want to save money on your policy? Our How to Get Cheaper Car Insurance guide has you covered.
• Considering adjusting your car insurance excess? Our Car Insurance Excess Costs guide explains what's important (and what it costs).

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 preimum. 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.

Want to know more? Our guide to car insurance excess has you covered, as does our video below:

It’s really important to know the difference between each type of car insurance so you only buy exactly what you need. Our third party guide covers the differences extensively, and is summarised below:
 
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) 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 $5,000 market value) who can afford to repair or replace it quickly in the case of an accident. Our guide to third party car insurance has more details.
 
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 can read more in our dedicated no-claims bonus guide here.

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.
​
Some insurers, such as AA Insurance, no longer offer no claims bonuses, instead choosing to automatically qualify customers for discounts rather than asking additional questions. ​

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.

Now that we’ve outlined the facts of car insurance, our 15+ tips to cut car insurance costs is packed with easy to-do steps which could save you hundreds of dollars every year.

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 the 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. ​

Our video guide below walks you through a standard comprehensive policy (we've used an example from AA Insurance). Before you buy any policy, please make sure you understand what you're not covered for. To many claims get denied in New Zealand year after year because people don't read their policies; it's an issue MoneyHub has talked about in this Stuff.co.nz article.

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 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 personal 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.