Car insurance
Get advice on shopping for the best car insurance in New Zealand, using our buying guide. Then compare policies and premiums using our survey.
How should you choose car insurance? We recommend the following steps:
Look at what you’re currently paying for car insurance. Then check our policy database to compare other companies' prices. If you don't need comprehensive car insurance, check out our survey of third-party only and third-party fire and theft premiums.
Get quotes from at least three car insurers. The prices you’re offered will depend on your age, gender, car, driving history and where you live. See our insurance satisfaction survey to find out the best and worst insurance providers.
Read the car insurance policies carefully before signing up. The worst time to discover the limitations of a policy is after you make a claim.
Types of car insurance policies
Comprehensive policies cover your car if it’s damaged or stolen, plus any damage you cause to someone else’s car or property.
Comprehensive car insurance policies may also offer extra benefits, either as part of the policy or that you can chose to add. For instance, if you have an accident or break down, they might cover the cost of towing your car to the nearest repairer or a safe location or subsidise the cost of getting you home.
Third-party only car insurance policies provide cover if you damage someone else’s car or property. They do not cover damage to your vehicle. That said, most policies offer a limited payout if an uninsured driver crashes into you and you can supply their registration and contact details.
Based on our survey, a third-party only car insurance policy for an individual driver is typically five to six times cheaper than a comprehensive policy.
Third-party fire and theft policies provide the benefits of third-party only car insurance policies, plus cover for your car if it’s stolen or damaged by fire. You may also get access to benefits not offered to third-party only policyholders, for instance, limited cover for the contents of your car.
See our third-party car insurance premium survey to compare premiums.
Factors that affect car insurance
Agreed or market value
Market value car insurance policies cover the value of your car immediately before it’s damaged. The payout is based on the amount a similar car would fetch on the retail market, as determined by your insurer.
Agreed value car insurance policies are where you and your insurer agree on your car’s value. Your insurer will pay the agreed amount if your car is written off, provided you’ve met the policy’s terms and conditions. As a car’s value decreases with age, you will need to revisit your car’s agreed value with your insurer whenever you renew your policy.
Car insurance excesses
If you need to make a claim on your car insurance, you’ll probably still have to contribute the first few hundred dollars (or more) towards your car’s repair or replacement – this is called the excess.
Most car insurance policies come with a standard excess. Generally, insurers allow you to choose a higher excess in exchange for a lower premium, or vice versa.
Younger drivers, and those on a restricted or learner’s licence, usually get stung with a higher excess. This excess can be as much as $1,350 for a driver under the age of 21 with a restricted licence.
High-theft excess
Owners of frequently stolen models may also be stung with a higher excess if their vehicle is stolen.
For example, Tower car insurance customers who own frequently stolen models, such as a Mazda Demio or Nissan Tiida, must pay an additional excess of up to $1,200 when they make a claim for theft.
If your vehicle is a frequently stolen model, shop around for the best insurance deal.
Some providers don’t impose a high-theft excess. If a high-theft excess applies, your insurer should make this clear to you before you sign the dotted line. If it hasn’t, consider filing a complaint with the Insurers and Financial Services Ombudsman.
See below about Making a complaint.
Young drivers
You should ask your car insurer to list your children on your policy.
Adding young drivers usually means a higher premium, as they’re considered a bigger risk. Depending on your car insurer, you may also lose your ‘no under-25 drivers’ discount.
But if you don’t list your children on your car insurance policy, you may not be covered if they crash your car. Or you could incur a sizeable excess.
Parents sometimes take out car insurance policies in their names to cover cars that are usually driven by their children – this is a bad idea!
If your insurer works out you’re ‘fronting’ for your kids, it can decline any claims and void the policy. You’ll be out of pocket and might find it difficult to get cover in the future.
How to save on car insurance premiums
Get quotes
Shopping around is one of the most reliable ways to save on car insurance premiums. There can be big variations both in the cost of the premiums, and the policy terms and benefits that insurers offer.
Increase your excess
Some car insurance providers will lower your premium if you take on a higher excess. If you opt to increase your excess, don't make it higher than you could comfortably afford to pay if you had to make a claim.
Ask for a no-claims discount
Some car insurance policies offer a no-claims discount on premiums. These discounts are ‘stepped’ – the more years you go without making a claim, the higher the discount. After 5 years without a claim, you can reach a maximum discount of around 60 to 65%. The discount can save you hundreds of dollars on your annual premiums.
Your no-claims discount won’t necessarily be affected if you do make a claim. For instance, most providers won’t penalise you if you’re not responsible for a crash and you can supply the other driver’s registration and contact details. Claims for broken windows and lost keys aren’t always tied to the discount either.
Ask about other car insurance discounts
There are often other types of discounts available to help lower your car insurance premiums. You might get a discount for:
having other insurance policies with the same company
having an alarm fitted in your car
parking your car in a garage
restricting the car insurance policy to named drivers
being over a certain age
paying an annual premium by direct debit.
Switch car insurance companies
Every time you get your annual renewal notice, check if you’d be better off switching companies. Our survey shows that changing car insurers can save you as much as $1,296 a year on comprehensive cover.
Bargaining for car insurance
If you like your existing car insurance company but it's not cheap, try bargaining – ask if it will match another insurer’s quote before you decide to leave.
What to do after a car accident
Check the driver of the other car is OK.
Don’t admit liability for the accident.
Get the other driver’s details, including their name, address, phone number, car registration and insurance company.
Write down the name and phone number of anyone who witnessed the accident.
Note other particulars about the crash, such as the time, location and chain of events.
Take all reasonable steps to prevent further loss or damage to your car.
Hang on to damaged property in case your insurer wants to inspect it.
Notify the police as soon as possible (and within 24 hours) if someone was hurt in the accident and required medical attention.
Contact your car insurer as soon as possible following the crash.
Tips for making a claim on car insurance
For a big accident, emergency services are likely to be involved. If so, get a copy of the incident number so your car insurer can follow it up.
For minor accidents, take the name, phone number and address of the other driver, the registration number of their vehicle and the name of their car insurer. It’s also helpful to take some photographs of the scene and damage to vehicles.
If you can’t move the car after an accident, you may need to have it towed to a secure location. Depending on your policy, your car insurer may cover this cost.
You’ll need a police report number if your car has been stolen.
If you’ve had items stolen from your car, they may be covered by your policy. If not, your contents insurance policy may provide cover.
Any repairs will need approval from your car insurer before they get done.
Getting repairs under your car insurance policy
When you’ve had a prang, car insurers will usually steer you in the direction of their approved repairers.
One benefit of this is that repairs done by a car insurer’s approved repairer could come with a guarantee by the insurer. This means if the repair fails, the car insurer will foot the bill. It’s important to note the duration of the guarantee – some repairs will be covered under the Consumer Guarantees Act (CGA).
Under the CGA, repairers must carry out their service with reasonable care and skill. If a repair fails soon after it is completed, the repairer may be liable under the CGA.
If you’d prefer to have repairs done by a repairer of your choice, double-check your car insurance policy allows this before you sign up. Then let your insurer know when you make a claim. If the insurer unreasonably refuses, you can make a compliant to the Insurance and Financial Services Ombudsman Scheme.
Making a complaint about your car insurance policy
Price is important when choosing your car insurer, but when you need to make a claim, you want the process to be as painless as possible.
If your car insurer gives you the runaround, you can complain for free to the Insurance and Financial Services Ombudsman Scheme.
In the 2023/24 financial year, the Insurance and Financial Services Ombudsman Scheme received a record 4,974 complaint enquiries, a 21% increase from the previous year. It accepted 479 complaints for investigation. The most complained-about issue was the scope of cover.

Paying too much for car insurance?
Our latest survey results found you could save hundreds of dollars a year by shopping around.
Third-party car insurance
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