Car insurance for beginners

AutoTrader NZ
Published 2 March 2021

Understanding Car Insurance in New Zealand

In New Zealand, car insurance isn’t mandatory but it is highly recommended. Accidents can happen, and without insurance, the financial burden can be significant. There are three main types of car insurance available: third party, third party, fire and theft, and comprehensive.

  1. Third Party: This is the most basic form of insurance. It covers damage you might cause to other vehicles or property but does not cover your own car. It’s the cheapest option and is suitable for older cars or those who can afford to replace their vehicle if it’s written off.
  2. Third Party, Fire and Theft: This includes third-party coverage and also protects against fire damage and theft of your car. It’s a middle ground between comprehensive and third party, offering additional peace of mind at a moderate cost.
  3. Comprehensive: This is the most inclusive option. It covers damage to your vehicle, even if you are at fault, along with damages to third party property. It also covers theft, vandalism, and natural disasters. This type is recommended for new or expensive cars and for drivers who want maximum protection against all possible incidents.

Tips for Choosing the Right Policy

  • Assess Your Needs: Consider the value of your car and how you use it. Do you commute daily or only drive occasionally? Are you in urban or rural areas? Your usage and vehicle value can guide your decision on the type of coverage you need.
  • Compare Policies: Use comparison websites to find the best rates and coverage. Look not only at price but also at what is covered. Check out the excess (the amount you pay towards any claim), exclusions, and customer reviews.
  • Ask for Discounts: Many insurers offer discounts for multiple policies, no claims histories, and even certain professions. Always ask what discounts are available when you’re shopping for car insurance.
  • Read the Fine Print: Understand your policy’s terms and conditions. Know what is covered and what is not to avoid surprises when you need to make a claim.

Car insurance is a crucial part of owning a vehicle in New Zealand. By choosing the right type and level of coverage, you ensure that you are protected financially while on the road. Whether you’re commuting in busy Auckland traffic or exploring the rural landscapes, the right car insurance policy can give you peace of mind and security.

Car Insurance Company Comparison Chart.

Insurance CompanyType of Coverage OfferedAverage Premium CostCustomer SatisfactionOnline Tools and AppsDiscounts Available
AA InsuranceComprehensive, Third Party$600/year4.5/5YesMulti-policy
Tower InsuranceComprehensive, Third Party$580/year4.2/5YesNo-claims, Multi-policy
State InsuranceComprehensive, Third Party$550/year4.0/5YesMulti-policy, Safe driver
AMI InsuranceComprehensive, Third Party$570/year4.3/5YesMulti-vehicle, Loyalty
Vero InsuranceComprehensive, Third Party$590/year4.1/5YesMulti-policy
NZIComprehensive, Third Party$560/year4.4/5YesBusiness, Multi-policy
2024 Car Insurance company comparison chart.