How do other cover types compare?

Everything you need to know about car insurance (in under 3 minutes)

Seven hacks to cut your premiums

1. Take advantage of discounts. Look around to see if you can get a loyalty discount or a deal for new customers. Some insurance providers will also supply a discount of up to 15% for taking out your policy online.
2. Pay a higher excess. The excess is an amount you pay when you want to make a claim. If you increase this amount, your insurance company perceives you as less likely to make a claim. This helps bring down the overall cost of your premium.
3. Restrict certain drivers. Most policies give you a cheaper premium if you restrict specific drivers from taking your wheels for a spin. Consider restricting drivers like under 25s, seniors, learners, or P-Platers.
4. Understand how your vehicle make and model affects your premium. If you haven’t purchased a car yet, compare insurance prices for a variety of car models. You might be surprised how much the car you drive can have an effect on how much car insurance costs.
5. Bundle your policies together. If you already have home insurance, consider sticking with the same provider for your auto insurance. When you group multiple policies, you can benefit from a multi-policy discount which can take a significant chunk out of your car insurance premium.
6. Keep a clean driving record. Obviously no one goes out of their way to receive a fine. However, your driving record and the history of the claims you lodge are used to determine how much of a risk you pose to the insurance company. The higher the level of risk, the more you have to pay. Conversely, if you have a good driving record and haven’t lodged many claims or none at all, there’s a good chance you’ll receive a better deal on your premium.
7. Compare, compare, compare. It pays to do your research. Get multiple quotes from different insurers to compare prices. Don’t be fooled by policies that are ridiculously cheap, as this can sometimes compromise your cover. Don’t be afraid to switch providers to get the best deal.

There are many reasons why you might want to leave your current insurer. Your circumstances might have changed; you might be paying a bucket load, or maybe you’re just fed up with their customer service. We get it! If you’re unhappy, there’s no reason why you can’t switch to another company.

Finding the right cover

• Why does customer service matter when choosing an insurer?

  In car insurance, customer service means much more than a smile as they fill out the paperwork. It means being able to depend on your insurer in the event of a claim, and knowing the next time you speak to them, you might be having a terrible day. It can help to focus on the essential factors, including:

  • Response times: How can you contact the insurer, no matter where or when? This includes how long it takes the customer service team to pick up the phone when you call; how quickly you can expect a response to online or email enquiries and how long it usually takes the insurer to assess and pay claims. It can be a good idea to avoid insurers that aren’t available 24 hours a day, 7 days a week, all-year around.
  • Claims options: If you needed to make a claim now, what would you do? If you have a preference for online claims or want to use an app, it is a good idea to look for insurers that offer these options. If you think you prefer to claim over the phone or in person, consider what exactly this involves.
  • Communication: Does the insurer stay in touch throughout the claims process? This can be a significant difference when you make a claim, as you don’t want to chase them for updates. Let them keep you in the loop instead.
  • Policy flexibility: How can you adjust your policy? Flexibility encompasses not only the options available to you but also the ease with which you can take advantage of them and the responsiveness of your insurer.
  • Partnered service quality: What’s the quality of the insurer’s service partners? Free roadside assistance may not be much use if it’s not available in your area. However, towing, vehicle storage, glass and windscreen replacement and other repairs all typically involve the use of partnered service providers. It can be a good idea to compare the quality of these and look for relevant reviews.

• How do I compare different car insurance policies?

  The ideal car insurance policy is one with an affordable price tag and the right amount of cover for your needs. If you have too much protection, you’ll be over-insured and spend more than you need. If you have too little, you’ll be under-insured and not efficiently protected.

  The trick is to find the right balance of cost and cover for your needs. Try running through this car insurance, buying checklist to discover your next policy.

  Car insurance buying guide

  Here’s a quick walk through how to find the right car insurance. The three steps are deciding, comparing and buying.

  Deciding

  • Decide on your cover type. What type of cover do I need? Comprehensive, third party, and third party fire and theft car insurance policies all offer different types of protection. You should know what kind of insurance you’re looking for before comparing policies.
  • Consider special cover types. If you want less than 12 months of insurance cover, you may want to look at short-term car insurance. If the general market value of your vehicle isn’t an accurate reflection of its worth, eg it’s modified, then you will probably want to narrow your search to agreed value car insurance providers.
  • Work out your preferred excess. Consider how much you are willing and can pay as an excess in the event of a claim. Think of this amount as the damage threshold, which determines whether or not you’ll claim if something happens. You often have the option to choose your own excess, but try to stick to the amount that you decide works for you.
  • Consider the options. There is a range of choices available. Some of the useful bonuses to think about are roadside assistance; lock and key replacements and excess-free windscreen and glass replacements. If you have a new car, you might want to check a policy’s new for old replacement terms.

  Once you decide what you need, you can start comparing suitable options.

  Comparing

  • Compare prices and discounts. Get quotes from different insurers and compare prices. As you do, make sure you look at equivalent quotes, with a similar excess in all cases and whether your quote has automatically added the various car insurance discounts. Sometimes an estimate that initially seems higher is actually cheaper after adding a discount. Multiple excesses often apply, so you need to look at these in detail and make sure you understand those that may apply in the event of a claim.
  • Compare the cover. You naturally want to make sure you compare the same type of car insurance in all cases, as well as considering the extras and other benefits, like roadside assistance or lock and key replacement.
  • Compare the fine print. The product disclosure statement (car insurance PDS) has the fine print of your car insurance policy. You want to look at the benefits and cover in detail, but don’t want to overlook some of the less obvious differences, such as the exact claims process; what evidence you need to provide. The PDS is a contract that explains what you get with your car insurance, so it pays to examine it in detail. If any learner drivers will get behind the wheel, or if multiple people will drive your car, it’s also worth looking at the conditions that may apply.

  After this, you might be ready to start buying.

  Buying

  • Nominate or restrict drivers. If no one under 25 will ever drive your car, it can be worth restricting drivers on your policy to receive lower premiums. If you know precisely who will be driving your car, you may be able to nominate specific drivers.
  • Opt-in or out of extras. Are you able to opt out of unwanted extras to save money, or choose desirable ones?
  • Remember that you can switch later. There’s a cool-off period after taking out a policy where you can cancel for a refund (provided you haven’t made any claims), and will also be able to switch policies later. A car insurance “lazy tax” might apply if you get complacent, so it can pay to get more car insurance quotes regularly, before renewal time.

• How to apply for car insurance

  Applying for car insurance involves first getting a quote, then the application process itself.

  Getting a quote

  The quote process differs depending on the insurance brand, though most follow similar steps to the ones listed below:

  • Specify what policy you want and when you want it to start: Comprehensive; third party, fire and theft or third party.
  • Input your vehicle type, including non-standard modifications and accessories; if the vehicle is for business or personal use, and if you want to insure it for an agreed or market value.
  • Enter your details and the details of any drivers.
  • Choose any policy extras and decide if you want to increase your excess to reduce the premiums.

  Applying

  Once you’re happy with how much you’ll spend each year or month, you have to go through the application process, which will go through the same steps as above but in further detail.

  When this is complete, you make your payment, and the policy will start on the date specified.

  The information you must disclose when applying

  While it may be tempting to avoid revealing details about your vehicle or driving history from your insurance brand, in doing so you only risk them rejecting a claim in the event you actually have an accident. Insurance companies go to great lengths to verify the information you provide in the event of a claim.

  • Driving convictions. Many motoring convictions are removed from your licence before you are considered rehabilitated. However, from a legal standpoint, you still have to inform the insurance company of any convictions for which you haven’t been rehabilitated.

  • Other criminal convictions. If you have any other criminal convictions, you must let the insurer know, as they can determine the level of premium you have to pay or the terms they offer you. If you don’t inform them, you may find yourself with a policy that is not valid.
  • Vehicle incidents. Most insurance companies require you to reveal your entire vehicular incident history, which not only refers to claims you have lodged yourself or have been lodged against you but also those about any other person driving on your policy. Such incidents could be accidents, joy riding, vandalism, damage to the windscreen, fire or theft.
  • Alterations. Most insurance companies require you to reveal any changes you have made to your car. Even if these alterations do not affect the performance of the vehicle, they may make it more valuable or increase the chances of it being stolen. Things like, installing speciality exhausts or tinting windows, which otherwise do not affect the performance of the vehicle, are considered changes of which you must inform your insurer. While this might seem strange, the fact is insurance companies have found people who make alterations to their vehicles statistically tend to have a greater likelihood of being involved in a claim.

  If any of the requirements that must be disclosed to your insurer seem unclear, it’s always worth giving them a call to verify the details and ensure you are adequately covered. Keep these details with the rest of your insurance documentation, in the event you have to provide future proof that you did as you were required.

Policy information

• When am I required to pay an excess?

  An excess is the charge you are required to pay on every claim you lodge. For example, if the rear and front of your car are damaged in two separate situations, you are required to make two claims, which means you need to pay an excess for each claim you lodge. The total amount you have to pay depends on the conditions under which you make a claim.

  If the insurance company agrees you or your vehicle were not to blame for the accident, and you can provide the contact information of the other driver or the registration number of the other car, some companies will waive the excess.

• Are there different types of excess to pay?

  Typically, there are five types of excess you may have to to pay, depending on the circumstances:

  1. 1. • Basic excess
        • Voluntary excess, which is an additional excess you can nominate to pay to make your premiums cheaper
        • Age excess, for those under the age of 25
        • Inexperienced driver excess, for those who haven’t held a licence long
        • Undeclared young driver excess, which applies when someone under 25 drives the car but isn’t listed on the policy

• What does the amount covered represent?

  The amount covered, represents the maximum sum an insurance company will pay for the damage or loss of your vehicle, minus applicable deductions, unless otherwise stated in the policy. This amount includes the entire value of the car, along with alterations and accessories and includes GST.

• Does car insurance include GST?

  Yes. Car insurance in New Zealand includes GST and is incorporated in the cost of premiums.

  This means the GST paid on car insurance may be claimed as a business expense, and may also entitle you to GST credits (input tax credit).

  For a vehicle that is used both for private and personal use, the GST paid on car insurance is divided according to the ratio of personal to business use. Learn more about insuring a car for business use here, or insuring vehicles for commercial use only here.

Purchasing, renewing or cancelling your policy

• How can I pay for a policy?

  You have the option of paying your premiums either fortnightly, monthly or an annual basis. In some cases, paying fortnightly or monthly instalments raises the total amount you pay each year.

• Is policy renewal automatic?

  If the insurance company is willing to renew your policy, in most cases you are notified a minimum of 14 days before the expiration date of your policy. The notice usually includes how much you have to pay, as well as when you have to pay. If you pay your premiums fortnightly or monthly, you won’t have to do anything as the company will continue to draw payment for your account on the same date each month. However, if you pay your premium as an annual lump sum, you should talk to your insurance company to see how you can make the payment.

• Do I need to do anything if the renewal contains wrong information?

  If your renewal doesn’t contain the correct information, you should get in touch with your insurer, as you have to make sure all your information is updated and accurate. If you don’t take action, to inform your insurer about any change to your circumstances that you are fully aware is relevant to your policy, you might end up with a reduced payout on a claim or no payout at all. Furthermore, your policy might be cancelled and if fraud is suspected, the insurance company may act as if the policy never existed.

• What is the cancellation procedure?

  In most cases, a car insurance policy can be cancelled by calling the insurance company or sending a written cancellation. Usually, if you cancel your policy outside the cooling off period, you receive a refund consisting of the portion of your premium that has not yet expired, after the cancellation fee (if any) has been deducted.

• How can I repair my car?

  Typically, your insurance company will help with getting your vehicle repaired. Depending on the insurer, you will be sent to one of its assessment centres or a recommended repairer, or you can use the repairer of your choice. In either case, an assessment is performed and repairs organised. Ensure you check your policy to see if you can choose your own repairer.

• What do I have to do if another person lodges a claim against me?

  You should contact your insurance company immediately, if you receive a letter making demands from another person involved in an event, even if it’s from their insurer or legal representative.

  If contact is initiated verbally, then inform the other party who your insurance company is and let them know the insurer will handle the claim. At no point, should you admit you were to blame for the damage or accident and you should certainly not make promises regarding covering their expenses.

  Write down as much information as possible about the other party, including their name; place of residence; telephone number and vehicle information. Then get in touch with your insurance company to let them know what has occurred, so that they can help you with the process.

• Do insurance companies insure all types of vehicles?

  No. Some insurance companies will not provide coverage for vehicles such as:

  1. 1. • Beach buggies
        • Classic and vintage cars
        • Commuter buses that can carry more than 12 passengers
        • Vehicles that are damaged
        • Vehicles that were formerly ambulances or taxis
        • Hearses
        • Horse floats
        • Privately imported vehicles

  1. 1. • Corsa Special Vehicles
        • Vans built for special purposes, like fire rescue vans
        • Rally cars
        • Refrigerated vehicles
        • Taxi trucks
        • Tractors
        • Vehicles that can carry over 2 tonnes

  If you aren’t sure whether your vehicle is eligible, it’s best to contact the insurance company directly and see what they say. There are also limitations in terms of what a vehicle will be used for. Many insurance companies will not provide coverage if the vehicle in question is used:

  1. 1. • As a courtesy car
        • For the transportation of inflammable liquids, explosives, chemicals, dangerous goods
        • In time trials

  1. 1. • In a racing competition or rally
        • For taxi services
        • For hire services
        • For racing
        • As a demo vehicle

  Again, not all of these will apply to every insurer, so your best option is to contact the insurance company direct and see what they say regarding your particular vehicle and its usage.

  As long as you give enough notice, most standard car insurance policies will let you cancel at any time. Bear in mind, a cancellation fee may apply, unless you’re switching to another policy with the same brand, or you’re within the cooling-off period.

What you will/won’t be covered for

• What drivers are covered under my policy?

  While this varies between insurers, usually a learner driver is covered by a car insurance policy as long as there is an instructing passenger in the front seat who is a fully licenced driver. In some cases, you don’t have to pay an additional premium but if the learner driver has an accident, you might have to pay an age or inexperience excess or both.

  Most car insurance policies also cover international drivers, as long as they can legally drive in New Zealand and have a valid licence. Of course, they must abide by the terms and conditions of the policy.

  If you drive while pregnant, it won’t affect your policy unless you’ve been advised to refrain from driving or your pregnancy could negatively impact your capacity to drive. To ensure you are fully able to drive, it is a good idea to consult your doctor.

• What about extras?

  Some insurance companies take things a step further than simply handling your claim. Some insurers offer a valet service, where they take care of all the details. Also, if your car can be driven safely, they will deliver it to where it needs to be. Typically, such perks are only available with comprehensive policies.

• Do insurers offer coverage and benefits for my children?

  Some insurance companies offer particular benefits for children if you are an existing customer. If your child wants to insure their vehicle with the same company, they might receive a rating for every year they have been driving and haven’t made a claim. Check with your insurance company, as some offer additional perks such as free one-day skilled drivers courses, which are meant to help with their driving skills and insurers offer discounts after completing the course.

• I need to change some information. What do I do?

  To change any information about the registration of your car or the regular driver, you have to contact the insurance company. You need to give them the number of your policy and/or the registration number of your vehicle; your mailing address (which must coincide with the address on the policy), and your birth date when submitting your request.

  Some details you may have to provide when changing the particulars of a regular driver include:

  • The frequency with which the person will be driving the car
  • What they will use the vehicle for
  • Their name, gender and date of birth
  • How long they have held their licence
  • Accident and claims history for the past three years. If there are such events, you must supply details of the accident, whether or not they were at fault and when it occurred.
  • Whether the driver has lost their licence, had it suspended or cancelled. If yes, you will need to provide details.

• What if I want to make alterations to my vehicle or add accessories?

  If you intend to alter your vehicle in any way that makes it different from the standard model, which includes adding non-standard accessories, you have to contact the insurance company. You need to provide your insurer with a list of the alterations and accessories, along with their monetary value. You also have the option to remove alterations and accessories from your policy by contacting the insurance company.

• How will I get around if my car is stolen?

  Some insurance companies provide their customers with a hire car for a limited period if their vehicle has been stolen. There may be the possibility of pre-purchasing a “discount hire car benefit” or “comprehensive hire car benefit”, which ensures you have access to a hire car while your vehicle is being repaired from damage caused in an accident.

• What about coverage for tools of trade and trailers?

  Most insurance companies will not cover tools of trade under a car insurance policy, meaning you will have to seek the services of a specialist insurer.

  Regarding trailers, some companies offer a limited degree of coverage for accidental damage caused to a trailer if it was connected to your vehicle.

• What if I am travelling overseas?

  Most car insurance policies only provide coverage while your vehicle is being driven in New Zealand. If you’re overseas, the policy doesn’t cover the vehicle or the personal liability of the driver.

• What happens if my car is a write-off?

  In some cases, the damage to a vehicle is so severe it’s not economical or safe to repair it. If the insurer feels this is the situation, your vehicle is declared a write-off and you will receive the amount covered or the agreed value.

  If you have comprehensive insurance, some policies allow for the replacement of your car with a new vehicle and coverage of on-road costs, if your original vehicle was declared a write-off after being stolen or damaged within the first two years of its initial registration.

• Will I be covered for driving off-road?

  Some insurance policies provide coverage for your vehicle if you are driving off-road, but you do have to take some precautions to make sure your car is safe.

• What's the difference between agreed and market value?

  Agreed Value	Market Value
  The sum insured that has been agreed upon between you and the insurer at the time of application or renewal	Recognised as the expected value of your car on the open market This is not the trade-in value or what it would be purchased for by a collector Will pay what your car is deemed to be valued for at the time of the accident This may not include warranty costs; vehicle transfer costs; stamp duty or dealer profit

  Should I choose the agreed value or market value?
  So market value or agreed value?

  When deciding if the market value is right for you, you need to consider if the reduced amount is enough to replace your lost vehicle. Is the money you save on your premium, worth the additional cost you will have to pay to purchase a new vehicle?

  That said, if you drive an older vehicle (say 10 to 15 years old), replacement cost may not be much of a concern, so it makes sense to save on the premium.

• What restrictions are there?

  There are certain restrictions when it comes to the type of coverage a car insurance policy offers. While these vary between insurance companies, some include:

  • You are not covered if the accident was caused by a fault with your vehicle, that you were aware of and chose to ignore.
  • You are not covered if your car was damaged during a race, trial, test, competition or similar arena.
  • You are not covered if your car was lost or damaged with intent, either by you or a person acting on your behalf.
  • You are not covered for any further loss or damage caused to your vehicle, if you drive it after it has been in an accident.

  Car insurance is a fundamental way to protect your asset and stay out of debt, so be sure you know what your policy covers, and how it works in the event of an accident.